Question

What is the company's net income for the month (as needed , round your final answer to the nearest whole dollar)?

As in the previous Participation Exercise, the Khalid Company manufactures and sells Paso- the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $6. The company recently had the following costs to produce 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 Tomatoes, onions, spices and bottles $18,000 D. E. Total payroll for salaried, administrative staff $6,000

Answer 1

Income Statement

Sales(12,000 units * $6)	$72,000
Less: Variable Cost
Payroll for factory workers	($24,000)
Raw Material cost (tomatoes,onions,spices etc)	($18,000)
Contribution	$30,000
Less: Fixed Cost
Selling Overhead (rent)	($5,000)
Factory Overhead (rent on factory and equipment)	($8,000)
Administration Overhead (staff salary)	($)6,000
Net Income	$11.000