You Are to Prepare a Projected Income Statement for a Proposed

question 122

Multiple Choice

You are to prepare a projected income statement for a proposed business venture. Your desired income is $28,000 and you have the following published statistics: Costs of Goods Sold = 56.9 percent of net sales
Operating Expenses = 37.1 percent of net sales
Gross Profit Margin = 43.1 percent of net sales
This information indicates the net sales on your pro forma "P & L" (income statement) would be ________.

• A)$466,667
• B)$491,228
• C)$500,000
• D)none of the above

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Definitions:

Assembly Department

A section within a manufacturing facility where components are put together to make a finished product.

Units Transferred Out

The completed units moved out of a production process or cost center to the next process, or finished goods inventory, during a period.

August

The Gregorian calendar's eighth month.

Weighted-Average Method

A costing method that calculates the cost per unit by dividing the total cost by the total number of units produced, treating all units as equal regardless of when they were actually manufactured.