Backyard Amenities is a manufacturer of backyard and deck furniture. Its products are in high demand, and it carries no inventory. To follow is a list of selected account balances from its trial balance for the most recent year ended December 31 (in no particular order).
Salaries and wages (for administrative and sales staff) .......................................... $ 38,100
Stain (used in manufacturing furniture) ................................................................... $ 14,500
Indirect labor costs (wages of maintenance workers in factory) ............................. $ 23,700
Other manufacturing overhead (includes factory insurance and property taxes).... $ 11,300
Rent and utilities (for administrative offices) ........................................................... $ 13,200
Utility costs (related to factory) ............................................................................... $ 12,100
Labor costs (wages of carpenters who build furniture) ........................................... $ 33,700
Accounts receivable ................................................................................................ $ 31,200
Marketing costs ....................................................................................................... $ 15,200
Wood (used in manufacturing furniture) ................................................................. $ 59,100
Sales revenues ..................................................................................................... $ 267,000
Accounts payable ..................................................................................................... $ 8,200
Requirements
Using the income statement accounts in the table, calculate:
1. Cost of goods sold. Hint: Cost of goods sold can be calculated by summing the total product costs since there is no inventory.
2. Operating expenses. Hint: Operating expenses are the company's period costs.
3. Gross profit
4. Operating income