In Its First Year of Operations,a Company Has Sales of $150,000,ending

question 37

Multiple Choice

In its first year of operations,a company has sales of $150,000,ending finished goods inventory of $10,000,variable manufacturing costs of $50,000,and fixed manufacturing costs of $30,000 for the year.The company pays 10% commission to its sales force and has fixed selling and administrative expenses of $25,000 annually.The company has no other variable expenses.Assuming the company uses direct costing,the net income for the year is

• A) $110,000.
• B) $95,000.
• C) $40,000.
• D) $13,000.

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