NB: Please go ahead and deduct the amount of questions answered out of the 20 qu
ID: 2403511 • Letter: N
Question
NB: Please go ahead and deduct the amount of questions answered out of the 20 questions that i am alloted for this month. I presently have 20 questions. Or advise me if i have to send them in single format.
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6. In 2013, SuperWidget, Inc., sold 100,000 widgets for $50 each. The cost of goods sold was $20 each. The company had $150,000 in marketing expenses, $50,000 in sales, and $20,000 in G&A. Also, the company has interest expense, as it is paying 10% interest on a $2 million loan due to the bank. The company pays a 30% tax rate. [15 points]
(a) What is the gross profit?
(b) What is the gross profit margin?
(c) What is the operating profit?
(d) What is the pre-tax income?
(e) What is the net income?
Explanation / Answer
Sales (100000*50) 5,000,000 Less: COGS (100000*20) 2,000,000 Gross Profit 3,000,000 Less: Operating expense Sales expense 50,000 Marketing expense 150,000 G &A expense 20,000 Operating income 2,780,000 Less: Interest expense 200,000 (2000,000*10%) Pre-tax income 2,580,000 Less: Tax @ 30% 774000 income after tax 1,806,000 Req a: Gross profit: 3000,000 Req b: Gross Profit margin: Gross profit/ Sales *100 3000,000 /5000,000 *100 = 60% Req c: Operating profits: 2780,000 Req d: Pre-tax income: 2580,000 Req e: Net income: $ 1806000
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