Mason Cabinet Company sells standard kitchen cabinets
The following information summarizes Mason's operating activities for the year:
Selling and Administrative Expenses $42,750
Purchases 85,700
Sales Revenue 154,500
Merchandise Inventory, January 1 12,500
Merchandise Inventory, December 31 16,200
Mason sold 950 cabinets during the year.
Calculate the operating income for the year.
Compute the unit cost for one cabinet (Round to two decimal places.)
What will be an ideal response
Operating income for the year
Mason Cabinet Company
Income Statement
Year Ended December 31, 20XX
Sales Revenue $154,500
Cost of Goods Sold:
Beginning Merchandise Inventory $12,500
Purchases 85,700
Cost of Goods Available for Sale 98,200
Ending Merchandise Inventory (16,200 )
Cost of Goods Sold 82,000
Gross Profit 72,500
Selling and Administrative Expenses 42,750
Operating Income $29,750
Unit cost for one cabinet = Cost of goods gold / Total units sold
= $82,000 / 950 cabinets
= $86.32 per cabinet
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