Candle in the Wind is a store for people who enjoy and collect candles to decorate their homes. Last year, its net sales totaled $125,000 with $13,700 in taxes. The cost value of the candles it sold was $42,300. The expenses that the operation has are salaries to the owner and one part-time assistant for $52,000, administrative expenses of $400, and utilities at $900. Calculate the net profit after tax for Candle in the Wind.
A) $29,400
B) $17,000
C) $53,300
D) $15,700
E) $16,100

Question

Quizplus · Accepted Answer

Expenses = $52,000 + $400 + $900 = $53,300
Gross Margin = Net Sales ? Cost of goods sold = $125,000 ? $42,300 = $82,700
Net Profit before tax = Gross Margin ? Expenses = $82,700 ? $53,300 = $29,400
Net Profit after tax = Net Profit before Tax ? Taxes = $29,400 ? $13,700 = $15,700

Candle in the Wind Is a Store for People Who