A Company Has Net Sales of $1,500,000,sales Commissions in the Amount

question 67

Multiple Choice

A company has net sales of $1,500,000,sales commissions in the amount of $194,000,net income of $366,400,and the gross profit ratio of 60%.What amount is listed as gross profit on the income statement for the period?

• A)$ 563,760
• B)$ 600,000
• C)$ 783,600
• D)$ 900,000
• E)$1,119,840

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Definitions:

Variable Costing

An accounting method that only considers variable costs for product costing, excluding fixed overheads.

Net Operating Income

Net operating income is the total profit a company generates from its operations, excluding taxes and interest, highlighting operational efficiency.

Absorption Costing

An accounting tactic where the entirety of manufacturing costs—direct materials, direct labor, and manufacturing overhead, both variable and fixed—are included in calculating a product’s cost.

Unit Product Cost

The total expense incurred to produce and deliver one unit of a product, including both direct and indirect costs.