During its first year of operations, Silverman Company paid $15,085 for direct materials and $10,200 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,200 while general, selling, and administrative expenses totaled $4,700. The company produced 6,050 units and sold 3,700 units at a price of $8.20 a unit.What was Silverman's net income for the first year in operation?
A) $4,550
B) $25,640
C) $5,055
D) $21,140

Question

Quizplus · Accepted Answer

Net income = (Sales revenue - Cost of goods sold - Operating expenses)Sales revenue = 3,700 units * $8.20 = $30,340Cost of goods sold = $15,085 + $10,200 = $25,285Operating expenses = $9,200 + $4,700 = $13,900Net income = $30,340 - $25,285 - $13,900 = $4,550

During Its First Year of Operations, Silverman Company Paid $15,085