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Harlamova29_29 [7]
3 years ago
11

Advanced Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year.

Business
1 answer:
Vesnalui [34]3 years ago
6 0

Answer:

$183,000

Explanation:

Advanced Company

<u>Income Statement for the year -  absorption costing</u>

Sales  ($71 x 21,000 units)     $1,491,000

Less Cost of Sales               ($1,008,000)

Gross Profit                              $483,000

Less Expenses

Operating expenses             ($300,000)

Net Income                              $183,000

where,

Cost of Sales = Units Sold x Product Cost

                      = 21,000 x $48

                      = $1,008,000

Product Cost = all manufacturing costs (absorption costing)

                      = $19 + $21 + $3 + ($175,000 ÷  35,000)

                      = $48

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