Question

Revenue $201,000 Less: Design supplies (variable $ 16,000 cost) Salary of Samantha Spade 80,000 (owner) Salary of Kim Bridesdale (full 55,000 time employee) Rent 18,000 Utilities 6,000 Depreciation of office 3,600 equipment Printing of advertising 700 materials Advertising in Middleton 2,500 Journal Travel expenses other than depreciation of autos $2,400 (variable cost) Depreciation of company 9,000 cars Required: Calculate the impact of the exhibit on company profit. Round to two decimal places.

Answer 1

The calculation of owners salary is treated in different way in different country and it also depends on the type of business organisation, here we are assuming that to calculate the profit, owners salary has to be treated as an expense.

Revenue 201,000.00 Less Variable cost Design Suplies 16000 Salary (Owner + Full time employee) 135000 Travel expenses 2400 Selling,General and Less Administrative cost Rent 18000 Utilities 6000 Printing of advertising material Advertising in Middleton journal 700 2500 Less Depreciation Office equipment 3600 9000 company cars Profit 7,800.00