Question

Cost of Goods Sold, Profit margin, and Net Income for a Manufacturing Company The following information is available for Bandera Manufacturing Company for the month ending January 31: Cost of goods manufactured $323,630 Selling expenses 108,110 Administrative expenses 57,150 Sales 688,570 Finished goods inventory, January 1 77,810 Finished goods inventory, January 31 70,920 For the month ended January 31, determine Bandera's (a) cost of goods sold, (b) gross profit, and (c) net income.

Answer 1

Answer:

Cost of goods sold = $330,520

Gross profit = $358,050

Net Income = $192,790

Explanation:

Cost of goods sold = Beginning inventory of FG + Cost of goods manufactured - Ending inventory of FG

Cost of goods sold = $77,810+$323,630-$70,920

Cost of goods sold = $330,520

Gross profit = Sales - Cost of goods sold

Gross profit = $688,570 - $330,520

Gross profit = $358,050

Net Income = Gross profit - Selling expenses - Administrative expenses

Net Income = $358,050 - $108,110 - $57,150

Net Income = $192,790