(L. OBJ. 4) Preparing an income statement and computing the unit cost for a merchandisin...

(L. OBJ. 4) Preparing an income statement and computing the unit cost for a merchandising company [15 min]

Gonzales Brush Company sells standard hair brushes. The following information summarizes Gonzales’s operating activities for 2011:

Requirements

1. Prepare an income statement for 2011. Compute the ratio of operating expense to total revenue and operating income to total revenue.

2. Gonzales sold 5,700 brushes in 2011. Compute the unit cost for one brush.