# Cost of goods sold, profit margin, and net income for a manufacturing company The following information is available for Bandera Manufacturing Company for the month ending January 31: Cost of goods manufactured $4,490,000 Selling expenses 530,000 Administrative expenses 340,000 Sales 6,600,000 Finished goods inventory, January 1 880,000 Finished goods inventory, January 31 7750,000 For the month ended January 31, determine Bandera’s (a) cost of goods sold, (b) gross profit, and (c) net income. BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 #### Solutions Chapter Section Chapter 18, Problem 18.17EX Textbook Problem ## Cost of goods sold, profit margin, and net income for a manufacturing companyThe following information is available for Bandera Manufacturing Company for the month ending January 31: Cost of goods manufactured$4,490,000 Selling expenses 530,000 Administrative expenses 340,000 Sales 6,600,000 Finished goods inventory, January 1 880,000 Finished goods inventory, January 31 7750,000 For the month ended January 31, determine Bandera’s (a) cost of goods sold, (b) gross profit, and (c) net income.

Expert Solution

a)

To determine

Cost of goods sold:

Cost of goods sold is the accumulate total of all direct cost incurred in manufacturing the goods or the products which has been sold during a period. Cost of goods sold involves direct material, direct labor, and manufacturing overheads.

Net income:

Net income is the total earnings generated by the company. Net income is calculated by deducting the operating expenses from the earnings (Profit).

Netincome = Gross profit – operating expenses

Gross Profit:

Gross Profit is the difference between the net sales, and the cost of goods sold. Gross profit usually appears on the income statement of the company.

To determine: The cost of goods sold for the month ended January 31.

### Explanation of Solution

The cost of goods sold is determined as follows:

 Particulars  Finished goods inventory, January 1 880,000 Cost of goods manufactured ...
Expert Solution

(b)

To determine
The gross profit.

Expert Solution

(c)

To determine
The net income.

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