28PGA_e - Horngren'S Financial And Managerial Accounting

Question

Clement Manufacturing makes carrying cases for portable electronic devices. Its costing records yield the following information:

Job No.	Date	Total cost of Job at October 31	Total manufacturing costs added in November
Started	Finished	Sold
1	10/03	10/12	10/13	\(1,300
2	10/03	10/30	11/01	1,400
3	10/17	11/24	11/27	1,000	\)900
4	10/29	11/29	12/03	1,200	1,200
5	11/08	11/12	11/14		650
6	11/23	12/06	12/09		500

Requirements

5. What is the gross profit for Job 3?

Step-by-Step Solution

Answer

The Gross profit for Job no. 3 is $400

Step 1: Net income

The net income of the company means the income earned after deducting all the expenses and the taxes incurred by the company in running the business.

Step 2: Gross profit

$\begin{array}{c}\mathrm{Grossprofit}=\mathrm{Sales}-\mathrm{Costofgoodssold}\\ =\$2,300-\$1,900\\ =\$400\end{array}$