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27 September, 05:54

Expert Manufacturing reported the following: Revenue $460,000 beginning inventory of direct materials, january 1, 2015 30,000 purchases of direct materials 15,800 ending inventory of direct materials, december 31, 2015 16,000 direct manufacturing labor 26,000 indirect manufacturing costs 42,000 beginning inventory of finished goods, january 1, 2015 45,000 cost of goods manufactured 97,800 ending inventory of finished goods, december 31, 2015 41,000 operating costs 158,000 what is expert's operating income?

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  1. 27 September, 09:10
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    Net operating profit = 200,200

    Explanation:

    Giving the following information:

    Revenue $460,000

    cost of goods manufactured 97,800

    beginning inventory of finished goods, January 1, 2015, 45,000

    ending inventory of finished goods, December 31, 2015, 41,000

    operating costs 158,000

    First, we need to calculate the cost of goods sold:

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

    COGS = 45000 + 97800 - 41000 = $101,800

    Now, we can structure the income statement:

    Revenues = 460,000

    COGS = 101,800

    Gross profit = $358,200

    Operating costs 158,000

    Net operating profit = 200,200
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