1. Analyze the income statement (excel spreadsheet) that you learned in your financial accounting. Calculate gross margin. Comment on Robstown Corp financial health given this limited information. Analyze the relationship between cost of goods sold and operating expense. (Perhaps, consider using the 'vertical analysis' that you learned from your financial accounting class).
2. Identify fixed cost and variable cost of Robstown Corp. Explain (or make reasonable assumption) for the selected expense that are not clear. Also calculate the contribution margin.
3. Robstown Corp. has an option to buy items for $1,500,000 (instead of manufacturing these in house). Should Robstown buy (outsource) or make (continue manufacturing)? Discuss both qualitative (non-financial) and quantitative aspects of your decision-making.
   • • Hint: "Make or buy" decision involves the understanding of fixed cost, variable cost, and contribution margin. Please search this concept in the future chapter (or google). Use these terms in your write ups.

Statement of cost of goods manufactured Particulars Amount Amount Work-in-process inventory $63,900 Direct materials: Opening material inventory $44.250 Add:Material purchased $556.600 Cost of material available for sales $600,850 Less: Closing material inventory $31.700 Cost of direct material used $569,150 Direct labor $1,100,000 Factory overheads: Depreciation expense $80,000 Heat, Light and the power of factory $53.300 Indirect labor $115.000 Property tax $40.000 Rent expense $27.000 Supplies $9,500 Miscellaneous cost $11.400 Total Factory overheads $336.200 Total manufacturing cost $2,069,250 Less: Work-in-process inventory $80,000 Cost of goods manufactured $1,989,250A B 1 Income statement 2 Particulars Amount Amount 3 Sales $3,850,000 4 Cost of goods sold: 5 Finished goods inventory $101.200 6 Add Cost of goods manufactured $1.989.250 7 Cost of material available for sale $2.090.450 8 Less Finished goods inventory $99.800 9 Cost of goods sold: $1,990,650 10 Gross profit $1,859.350 11 12 Less: Operating expenses 13 Depreciation expense $30,000 14 Office salaries expense $318.000 15 Property taxes-office building $25.000 16 Advertising expense $400.000 17 Sales salaries expense $200.000 18 Total operating expenses $973,000 19 Net operating income $886,350