House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $3,400 each. The average cost of an organ from the manufacturer is $1,486. The costs that the company incurs in a typical month are presented below:

Costs	Cost Formula
Selling:
Advertising	$956 per month
Delivery of organs	$58 per organ sold
Sales salaries and commissions	$4,829 per month, plus 5% of sales
Utilities	$641 per month
Depreciation of sales facilities	$4,966 per month
Administrative:
Executive salaries	$13,467 per month
Depreciation of office equipment	$891 per month
Clerical	$2,469 per month, plus $40 per organ sold
Insurance	$698 per month

During November, the company sold and delivered 63 organs.

Required:
1.	Prepare a traditional income statement for November. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

House Of Organs, Inc. Traditional Income Statement For the Month Ended November 30
Sales		$
Cost of goods sold
Gross margin
Selling and administrative expenses:
Selling expenses:
Advertising	$
Delivery of organs
Sales salaries and commissions
Utilities
Depreciation of sales facilities
Total selling expenses
Administrative expenses:
Executive salaries
Depreciation of office equipment
Clerical
Insurance
Total administrative expenses
Total selling and administrative expenses
Net operating income		$

2.	Prepare a contribution format income statement for November. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

House Of Organs, Inc. Contribution Format Income Statement For the Month Ended November 30
	Total	Per unit
Sales	$	$
Variable expenses:
Cost of goods sold
Delivery of organs
Sales commissions
Clerical
Total variable expenses
Contribution margin		$
Fixed expenses:
Advertising
Sales salaries
Utilities
Depreciation of sales facilities
Executive salaries
Depreciation of office equipment
Clerical
Insurance
Total fixed expenses
Net operating income	$

rev: 08_31_2013_QC_34650 
 
Explanation:

1.

Sales: (63 organs × $3,400 per organ) = $214,200

Cost of goods sold: (63 organs × $1,486 per organ) = $93,618

Delivery of organs: (63 organs × $58 per organ) = $3,654

Sales salaries and commissions: [$4,829 + (5% × $214,200)] = $15,539

Clerical: [$2,469 + (63 organs × $40 per organ)] = $4,989

2.

Sales: (63 organs × $3,400 per organ) = $214,200

Cost of goods sold: (63 organs × $1,486 per organ) = $93,618

Delivery of organs: (63 organs × $58 per organ) = $3,654

Sales commissions: (5% × $214,200) = $10,710

Clerical: (63 organs × $40 per organ) = $2,520