Net sales $300,000 Cost of goods sold -180,000 Gross profit 120,000 General and administrative -60,000 Marketing expenses -60,000 Depreciation -20,000 EBIT -20,000 Interest expenses -10,000 Earnings before taxes -30,000 Income taxes -0 Net earnings (loss) -$ 30,000
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- Fixed Costs: General and administrative expenses ($60,000), Marketing expenses ($60,000), Depreciation ($20,000), Interest expenses ($10,000). - Variable Costs: Cost of goods sold (COGS), which is a constant percentage of sales. Show more…
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A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Sales $7,300,000 Cost of goods sold $4,780,000 Gross margin $2,520,000 Selling and administrative expenses: Selling expenses $1,399,000 Administrative expenses $711,000 Total expenses $2,110,000 Net operating income $410,000 Interest expense $103,000 Net income before taxes $307,000 Last Year Sales $5,548,000 Cost of goods sold $3,510,500 Gross margin $2,037,500 Selling and administrative expenses: Selling expenses $1,081,500 Administrative expenses $613,000 Total expenses $1,694,500 Net operating income $343,000 Interest expense $91,000 Net income before taxes $252,000 Members of the company's board of directors are surprised to see that net income increased by only $55,000 when sales increased by $1,752,000. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) This Year Sales 100.0% Cost of goods sold 65.5% Gross margin 34.5% Selling and administrative expenses: Selling expenses 19.1% Administrative expenses 9.7% Total selling and administrative expenses 28.9% Net operating income 5.6% Interest expense 1.4% Net income before taxes 4.2% Last Year Sales 100.0% Cost of goods sold 63.3% Gross margin 36.7% Selling and administrative expenses: Selling expenses 19.5% Administrative expenses 11.0% Total selling and administrative expenses 30.5% Net operating income 6.2% Interest expense 1.6% Net income before taxes 4.5%
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Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials: $7.00 Direct labor: $4.00 Variable manufacturing overhead: $1.50 Fixed manufacturing overhead: $5.00 Fixed selling expense: $3.50 Fixed administrative expense: $2.50 Sales commissions: $1.00 Variable administrative expense: $0.50 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. For financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units? 1. Total amount of product costs = 2. Total amount of period costs incurred = 3. Total amount of product costs = 4. Total amount of period costs incurred =
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