EX 18-16 Cost of goods sold, profit margin, and net income for a manufacturing company

The following information is available for Vogt Manufacturing Company for the month ending July 31, 2014:


Cost of goods manufactured $360,000
Selling expenses 114,750
Administrative expenses 60,750
Sales 729,000
Finished goods inventory, July 1 81,000
Finished goods inventory, July 31 75,000




For the month ended July 31, 2014, determine Vogt’s (a) cost of goods sold, (b) gross profit, and (c) net income.


Answer:

a. Finished goods inventory, July 1, 2014…………………………… $ 81,000
Cost of goods manufactured………………………………………… 360,000
Cost of finished goods available for sale………………………… $441,000
Less finished goods inventory, July 31, 2014…………………… 75,000
Cost of goods sold……………………………………………………… $366,000
b. Sales……………………………………………………………………… $729,000
Cost of goods sold……………………………………………………… 366,000
Gross profit……………………………………………………………… $363,000
c. Gross profit…………………………………………………………… $363,000
Operating expenses:
Selling expenses…………………………………………………… $114,750
Administrative expenses………………………………………… 60,750
Total operating expenses……………………………………… 175,500
Net income……………………………………………………………… $187,500