Sanchez Products has no Work in Process or Finished Goods inventories at the close of business on December 31 of the current year.The balances of Sanchez Products' accounts as of December 31 are as follows:
$\begin{array}{ll}
\text { Cost of goods sold-unadjusted } & \$ 2,040,000 \
\text { Selling \& administrative expenses } & 900,000 \
\text { Sales } & 3,600,000 \
\text { Manufacturing overhead control } & 700,000 \
\text { Manufacturing overhead applied } & 648,000
\end{array}$

Pretax income for the current year is:

Question

Sanchez Products has no Work in Process or Finished Goods inventories at the close of business on December 31 of the current year.The balances of Sanchez Products' accounts as of December 31 are as follows:
$\begin{array}{ll}
\text { Cost of goods sold-unadjusted } & \$ 2,040,000 \
\text { Selling \& administrative expenses } & 900,000 \
\text { Sales } & 3,600,000 \
\text { Manufacturing overhead control } & 700,000 \
\text { Manufacturing overhead applied } & 648,000
\end{array}$

Pretax income for the current year is:

Quizplus · Accepted Answer

Pretax income is calculated as Sales - Cost of goods sold - Selling & administrative expenses - Manufacturing overhead control + Manufacturing overhead applied.Pretax income = $3,600,000 - $2,040,000 - $900,000 - $700,000 + $648,000 = $608,000.

Sanchez Products Has No Work in Process or Finished Goods