Scottsdale Fine Piano%u2019s purchases pianos from a well-known manufacturer and sells them through their retail store. The Baby Grand Pianos sell, on average, for $2,500 each. The average cost of a piano from the manufacturer is $1,500. The costs that the Company incurs in a typical month are presented below.
Selling Costs:
- Advertising $ 950 Per Month
- Delivery of Pianos $ 60 Per Piano Sold
- Sales Salaries and Commissions $ 4,800 Per Month, plus 4% of Sales
- Utilities $ 650 Per Month
- Depreciation on Sales Facilities $ 5,000 Per Month
- Administrative Costs:
- Executive Salaries $13,500 Per Month
- Depreciation of Office Equipment $ 900 Per Month
- Clerical $ 2,500 Per Month, plus $40 Piano Sold
- Insurance $ 700 Per Month