Prepare a Partial Income Statement Starting with Income Before Income

question 72

Essay

Prepare a partial income statement starting with income before income taxes with the information below for Sawyer Corporation for the year ending December 31, 2012. The tax rate for Sawyer Corporation is 35%:

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, excluding direct labor and direct materials.

Utilities Incurred

Costs accumulated from the consumption of utility services such as electricity, water, and gas.

Selling and Administrative Expense

Combined costs related to the selling of goods and the general administrative activities of a company, excluding production costs.

Direct Materials

Raw materials that are consumed in the production process and can be directly attributed to specific products.