Problem 2-14 House of Organs,

    Problem 2-14House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level. The organs sell, on the average, for $2,500 each. The average cost of an organ from the manufacturer is $1,500. The costs that the company incurs in a typical month are presented below:Costs Cost FormulaSelling:Advertising $950 per monthDelivery of organs $60 per organ soldSales salaries and commissions $4,800 per month, plus 4% of salesUtilities $650 per monthDepreciation of sales facilities $5,000 per monthAdministrative:Executive salaries $13,500 per monthDepreciation of office equipment $900 per monthClerical $2,500 per month, plus $40 per organ soldInsurance $700 per monthDuring November, the company sold and delivered 60 organs.Required:1.Prepare a traditional income statement for November. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “$” sign in your response.)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.)3. Refer to the income statement you prepared in (2) above. Why might it be misleading to show the fixed costs on a per unit basis?

    Order for this paper or request for a similar assignment by clicking order now below

    Order Now

    Do NOT follow this link or you will be banned from the site!