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Leni [432]
3 years ago
8

Morning Smiles Coffee Company manufactures Stoneware French Press coffee makers and sold 8,000 coffee makers during the month of

March at a total cost of $612,500 Each coffee maker sold at a price of $100. Morning Smiles also incurred two types of selling costs: commissions equal to 5% of the sales price and other selling expense of $45,000. Administrative expense totaled $47,500
Required:

Prepare an income statement for Morning Smiles for the month of March and calculate the percentage of sales revenue represented by each line of the income statement. (Note: Round answers to one decimal place.)
Business
1 answer:
wariber [46]3 years ago
8 0

Answer:

The income statement is a report that shows the financial performance of a business for a over a given period of time, in this case a month.

Explanation:

Morning Smiles

Income statement for the Month

                                                                   $

Sales revenue                800,000  

Cost of sales                        <u>(612,000)   </u>

Gross profit                          188,000

Less  

Variable selling cost(5%×800,000) <u> (40,000)   </u>

Contribution                              148,000

Other selling cost                   (45,000)

Administrative expense    <u>(47,500)</u>

Profit                                      55,500

Cost of sales = 612,000/800,000=  76.5%

Gross profit   = 188,000/800,000=  23.5%

Variable sell. cost = 40,000/800,000 =  5%

Contribution =  148,000/800,000 =  18.5%

Other selling cost = 45,000/800,000= 5.6%

Administrative expe= 47,500/800,000 = 5.9%

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