Calculate narcissus companys gross profit for quarter three

Reference no: EM13903926

Manufacturer's income statement: alternative expense classi?cation

Narcissus makes mirrors. N asks for your help in preparing an income statement for the third quarter of x2, using the information below. The company is short-staffed and N is preoccupied with quality inspection.

Quarter 3, x2

In B000

Raw materials

Start

End

Work-in-progress

Finished mirrors

During quarter 3, x2

	Production department	Sales and admin. departments
Materials purchased	50	-
Supplies purchased and used	-	2
Salaries and employee benefits	46	28
Depreciation	23	11
Utilities and other overheads	8	4

The company sells 25,000 mirrors at a unit price of A8. The corporate income tax rate is 30%.

Required

(a) Calculate Narcissus Company's gross profit for quarter 3, x2.

(b) Draw up an income statement for Narcissus Company for the third quarter of x2. Assume the company classifies expenses:

(i) by function; and

(ii) by nature.

Reference no: EM13903926

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