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 $3,100 each. The average cost of an organ from the manufacturer is $1,510. The costs that the company incurs in a typical month are presented below:

Costs	Cost Formula
Selling:
Advertising	$965 per month
Delivery of organs	$59 per organ sold
Sales salaries and commissions	$4,812 per month, plus 4% of sales
Utilities	$657 per month
Depreciation of sales facilities	$4,952 per month
Administrative:
Executive salaries	$13,492 per month
Depreciation of office equipment	$933 per month
Clerical	$2,508 per month, plus $40 per organ sold
Insurance	$716 per month

During November, the company sold and delivered 56 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: (56 organs × $3,100 per organ) = $173,600

Cost of goods sold: (56 organs × $1,510 per organ) = $84,560

Delivery of organs: (56 organs × $59 per organ) = $3,304

Sales salaries and commissions: [$4,812 + (4% × $173,600)] = $11,756

Clerical: [$2,508 + (56 organs × $40 per organ)] = $4,748

2.

Sales: (56 organs × $3,100 per organ) = $173,600

Cost of goods sold: (56 organs × $1,510 per organ) = $84,560

Delivery of organs: (56 organs × $59 per organ) = $3,304

Sales commissions: (4% × $173,600) = $6,944

Clerical: (56 organs × $40 per organ) = $2,240