Clapton Inc.would like to prepare an income statement for March.Their production department records show that total product costs in March were $225 000 when 50 000 units were produced.Their sales department records show that 46 000 units were sold for $16 each.Monthly administrative and marketing expenses totalled $60 000.What should be net income for March?

Question

Quizplus · Accepted Answer

The revenue from sales is 46,000 units * $16 = $736,000. The cost of goods sold is (46,000/50,000) * $225,000 = $207,000. The total expenses are $207,000 (COGS) + $60,000 (administrative and marketing) = $267,000. Net income is $736,000 - $267,000 = $469,000.