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1) Ending finished goods inventory is one thousand units . Total cost per unit is fifteen dollar and selling price per unit is twenty two dollars .
2) Total units produced during the period is one thousand units .
3) administrative expenses is four hundred dollars for the period .
4) Selling expenses is two hundred dollars .
- Hence its net income is :
A) Net profit six thousand and four hundred dollars .
B) Net profit Six thousand and and six hundred dollars .
C) Net losses six hundred dollars .
D) No income statement for this period required .
D No Income Statement for this period is required coz there is not any sales you are holding finished goods inventory only so these figuers are related to statement of financial position.
a net profit amounting to 6,400 dollars
C- is the correct answer .
COGS = Beginning Inventory + Net Purchases - Ending Inventory
COGS = ($15 x 1.000 units) = $15.000
Sales= Selling price per unit x units produced = $22 x 1.000 units = $22.000
Net Income = Sales - COGS - admin. exp. - Selling exp = $6.400
