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The net sales of Flamingo Mfg
The net sales of Flamingo Mfg. Company in 2015 is P5,800,000.
The cost of goods manufactured is P4,800,000. The beginning
inventories of goods in process and finished goods are P820,000
and P650,000, respectively. The ending inventories are: Goods
in process- P750,000; Finished goods- P550,000. The selling
expenses and general and administrative expenses are 5% and
2.5% of cost of sales, respectively.
59.
What is Flamingo’s profit for the year 2015?
a.
P900,000
b.
P457,250
c.
P532,500
d.
P830,000
Expert Solution
Answer
c .
Explanation
Calculation of Net profit:
| Particulars | Amount |
| Net Sales | 5,800,000 |
| Less: Cost of Sale | 4,900,000 |
| Less: Selling Expense @5% of Cost of Sale | 245000 |
| Less: Administrative Expense @2.5% of Cost of Sale | 122500 |
| Net Profit | 532,500 |
Workings:
Cost of sale=Opening Inventory of Finished goods+Cost of goods manufactured-Closing Inventories of finished goods
=650,000+4800,000-550,000
=4,900,000
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