Answer :
Answer:
Cook Co.
Net Income
d) $908,600
Explanation:
a) Data and Calculations:
Cook Co. Information for the current year:
Materials inventory, Jan 1 120,000
Materials purchased 980,000
Materials inventory, Dec 31 86,000
Materials used 1,014,000
Work-in-process, Jan 1 30,000
Materials used 1,014,000
Direct labor 680,000
Total overhead costs 408,000
Work-in-process, Dec 31 (20,000 )
Cost of production $2,112,000
Finished Goods, Jan 1 210,000
Cost of production 2,112,000
Finished Goods, Dec 31 (400,000 )
Cost of Goods Sold $1,922,000
Manufacturing overhead costs:
Saper Sandpaper $ 17,000
Machine helpers’ salaries 86,000
Small tools 100,000
Leasing costs, plant 120,000
Depreciation, plant 70,000
Property taxes, plant 10,000
Insurance, factory equipment 5,000
Total overhead costs $408,000
Sales Commissions 200,000
Sales salaries 180,000
Advertising costs 150,000
Office administration costs 250,000
Total expenses $780,000
Sales 4,000,000
Cost of Goods Sold $1,922,000
Gross profit $2,078,000
Less expenses 780,000
Profit before tax 1,298,000
Income Tax (30%) 389,400
Net Income $908,000