Amway Company manufactures and distributes nutrition, beauty, personal care and home products. The company has no...
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Amway Company manufactures and distributes nutrition, beauty, personal care and home products. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 1/3 % for all items sold. Barbara Cheney, Amway's controller, has just prepared the company's budgeted income statement for next year as follows: Amway Company Budgeted Income Statement For the Year Ended December 31 Sales $ 16,000,000 Manufacturing expenses: Variable $7,200,000 Fixed overhead 2,340,000 9,540,000 Gross margin 6,460,000 Selling and administrative expenses: Commissions to agents 2,400,000 Fixed marketing expenses 120,000 Fixed administrative expenses 1.800,000 4.320,000 Net operating income 2,140,000 Fixed interest expenses 540,000 Income before income taxes 1,600,000 Income taxes (30%) 480,000 Net income $ 1,.120,000 Amway Company manufactures and distributes nutrition, beauty, personal care and home products. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 1/3 % for all items sold. Barbara Cheney, Amway's controller, has just prepared the company's budgeted income statement for next year as follows: Amway Company Budgeted Income Statement For the Year Ended December 31 Sales $ 16,000,000 Manufacturing expenses: Variable $7,200,000 Fixed overhead 2,340,000 9,540,000 Gross margin 6,460,000 Selling and administrative expenses: Commissions to agents 2,400,000 Fixed marketing expenses 120,000 Fixed administrative expenses 1.800,000 4.320,000 Net operating income 2,140,000 Fixed interest expenses 540,000 Income before income taxes 1,600,000 Income taxes (30%) 480,000 Net income $ 1,.120,000
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Related Book For
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam
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