House of Organs, Inc., purchases organs from a well-known manufacturer and sells them at the retail level (A+)

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 $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 Formula

Selling:

Advertising

$950 per month

Delivery of organs

$60 per organ sold

Sales salaries and commissions

$4,800 per month, plus 4% of sales

Utilities

$650 per month

Depreciation of sales facilities

$5,000 per month

Administrative:

Executive salaries

$13,500 per month

Depreciation of office equipment

$900 per month

Clerical

$2,500 per month, plus $40 per organ sold

Insurance

$700 per month

During 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.)

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