Question

XYZ Company recorded the following information related to their inventory
accounts for 2020:

                          January 1, 2020        December 31, 2020
Direct materials               50,000                   37,000
Work in process                38,000                   41,000
Finished goods                 32,000                   34,000

The following costs were taken from XYZ Company's accounting records for
2020:

Direct materials purchased ..............................   $129,000
Depreciation, factory equipment .........................     37,000
Sales revenue ...........................................    590,000
Utilities (60% for factory; 40% for office building) ....     30,000
Sales commissions .......................................       ?
Indirect materials ......................................     29,000
Depreciation, office equipment ..........................     33,000
Rent, factory building ..................................     60,000
Net income ..............................................     10,000
Direct labor ............................................     90,000
Advertising .............................................     57,000
Production supervisor's salary ..........................     82,000

Assume that the actual overhead cost for 2020 was equal to the overhead
applied to production. Thus there was no overhead variance for 2020.

Calculate XYZ Company's sales commissions for 2020.

Answer 1

Particulars		$
Revenue		590,000
Less: Expenses
Consumption of Material (Refer Note 1)	137,000
Depreciation- Factory equipment	37,000
Utilities	30,000
Indirect Material	29,000
Depreciation - office equipment	33,000
Rent	60,000
Direct labour	90,000
Advertisement	57,000
Salary	82,000	555,000
Net Income including Sales comm		35,000
Less: Net income		10,000
Sales Commission		25,000
Note 1:
Opening Material (as on 1st Janaury)
Direct material	50,000
Work in progress	38,000
Finished goods	32,000
Add: Purchase of material	129,000
Less: Closing material (as on 31st December)
Direct material	37,000
Work in progress	41,000
Finished goods	34,000
Consumption of material	137000