Question

Mason Corporation began operations at the beginning of the current year. One of the company's products, a refrigeration element, sells for $205 per unit. Information related to the current year's activities follows. 46 Variable costs per units Direct material Direct labor Manufacturing overhead Annual fixed costs: Manufacturing overhead Selling and administrative Production and sales activity! Production (units) Sales (units) $600,000 860,000 24,000 20,000 Mason carries its finished goods inventory at the average unit cost of production and is subject to a 30 percent income tax rate. There was no work in process at year-end. Problem 2-40 Part 2 2. Compute Mason's net income for the current year ended December 31. Net income

please show work, thank you so much!

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer 3 To calculate the net income we have to prepare the income statement 4 Income Statement 6 Particular 7 Sales (205*20000) 2$ 41,00,000 8 Cost of goods sold 9 Beginning inventory 10 Cost of goods manufactured (((10+37+46)*24 $ 11 Ending inventory (2832000/24000*4000) 12 Gross margin 13 selling and adminstrative expenses 28,32,000 4,72,000 $ 23,60,000 17,40,000 8,60,000 14 Net income before tax 8,80,000 15 Tax expenses (@ 30%) 16 Net Income 2,64,000 6,16,000 17 18 Thus the correct answer net income = $ 616000 %3D 19