Franklin Street Manufacturing has the following cost information available for 2009:
$\begin{array}{lr}
\text { Direct materials used } & \$ 10000 \
\text { Direct labour costs } & 25000 \
\text { Factory overhead } & 20000 \
\text { Marketing expenses } & 4000 \
\text { Administrative expenses } & 6000
\end{array}$

20 000 units were produced during the year out of which 19 000 units were sold for $10 each.
-What is net income for 2009?

Question

Franklin Street Manufacturing has the following cost information available for 2009:
$\begin{array}{lr}
\text { Direct materials used } & \$ 10000 \
\text { Direct labour costs } & 25000 \
\text { Factory overhead } & 20000 \
\text { Marketing expenses } & 4000 \
\text { Administrative expenses } & 6000
\end{array}$

20 000 units were produced during the year out of which 19 000 units were sold for $10 each.
-What is net income for 2009?

Quizplus · Accepted Answer

Net income is calculated as total revenue minus total expenses. Total revenue is $190,000 (19,000 units sold at $10 each). Total expenses include direct materials, direct labor, factory overhead, marketing, and administrative expenses, totaling $65,000. Therefore, net income is $190,000 - $65,000 = $125,000.

Franklin Street Manufacturing Has the Following Cost Information Available for 2009