In Its First Year of Operations, a Company Has Sales

question 104

Multiple Choice

In its first year of operations, a company has sales of $158,000, ending finished goods inventory of $11,500, variable manufacturing costs of $49,000, and fixed manufacturing costs of $31,000 for the year. The company pays 9% commission to its sales force and has fixed selling and administrative expenses of $27,000 annually. The company has no other variable expenses.
Assuming the company uses direct costing, the net income for the year is

• A)$52,280.
• B)$83,280.
• C)$25,280.
• D)$48,280.

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