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29 September, 01:45

The following information is available for Bandera Manufacturing Company for the month ending January 31:

Cost of goods manufactured $4,490,000

Selling expenses 530,000

Administrative expenses 340,000

Sales 6,600,000

Finished goods inventory, January 1 880,000

Finished goods inventory, January 31 775,000

For the month ended January 31, determine Bandera Manufacturing's

(A) cost of goods sold,

(B) gross profit, and

(C) net income.

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Answers (1)
  1. 29 September, 04:56
    0
    Instructions are listed below.

    Explanation:

    Giving the following information:

    Cost of goods manufactured $4,490,000

    Selling expenses 530,000

    Administrative expenses 340,000

    Sales 6,600,000

    Finished goods inventory, January 1 880,000

    Finished goods inventory, January 31 775,000

    A) COGS = beginning finished inventory + cost of goods manufactured - ending finished inventory

    COGS = 880,000 + 4,490,000 - 775,000 = $4,595,000

    B) Gross profit = sales - cogs = 6,600,000 - 4,595,000 = 2,005,000

    C) Net operating profit = gross profit - selling expense - administrative expense

    NOP = 2,005,000 - 530,000 - 340,000 = $1,135,000
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