Question

The following information relates to Marshall Manufacturing's current accounting period: Raw materials used $ 34,000 Direct labor wages 66,000 Sales salaries and commissions 50,000 Depreciation on production equipment 6,000 Rent on manufacturing facilities 4,000 Administrative supplies and utilities 10,000 Sales revenue 210,000 Units produced 10,000 Units sold 10,000 Based on this information, what is the company's net income?

Answer 1

The company's net income is $40,000

Step-by-step explanation:

Total cost to produce 10,000 units = Raw materials used + Direct labor wages + Depreciation on production equipment + Rent on manufacturing facilities = $34,000 + $66,000 + $6,000 + $4,000 = $110,000

Units sold were 10,000 units = Units produced

Cost of goods sold = Total cost to produce 10,000 units = $110,000

The company's net income = Sales revenue - Cost of goods sold - Sales salaries and commissions - Administrative supplies and utilities = $210,000 - $110,000 - $50,000 - $10,000 = $40,000