Jane, Rayna, and Shiva started JRS Inc. together five years ago. JRS Inc. makes leather purses...

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Jane, Rayna, and Shiva started JRS Inc. together five years ago. JRS Inc. makes leather purses targeted at professional women. While Shiva is devoted full time to the business, Jane and Rayna are lawyers with demanding careers. The three of them met in an undergraduate entrepreneurship class, and have been friends and business partners since then. JRS Inc. has been making profits and expanding. Shiva is not sure that he can pull this off without a full-time commitment from his two friends. Jane and Rayna are interested in making a full-time switch to the business if the income from the business is sufficiently high that they can give up their lucrative salaries. They want to dive deeper into the numbers and understand what different business conditions would mean for their bottom line. They would like the operating income to be around $1,500,000 to consider making a full-time switch. They have many questions that need to be answered. They asked Shiva to give them some data. Shiva provided them with the following details. JRS Inc. sells whatever it makes. There is no work in process or finished goods inventory. Shiva has collected some data relating to the most recent year. They incurred manufacturing costs of $3,240,000 during the recent year which includes $1,200,000 for materials, $800,000 for labor and $1,240,000 for other manufacturing costs (depreciation, factory rent and miscellaneous). The materials and the labor can be traced to each purse. The other manufacturing costs increase with the volume of purses but not in an exact proportion. JRS Inc. pays their sales staff commissions of 10% on the sales price. Their other general administrative expenses are $960,000 a year. JRS Inc. manufactured and sold 12,000 leather purses at a selling price of $500 per purse during the recent year. Shiva is considering expanding their product line by adding leather briefcases to their product line. The marketing consultant that Shiva hired concluded that there is demand for their leather purses and leather briefcases. What is the current profitability? Prepare an income statement for the company in a simplified functional format. Income Statement Format Sales Less: Cost of goods sold Gross margin Less: Selling, general & administrative expenses Operating Income Amounts Jane, Rayna, and Shiva started JRS Inc. together five years ago. JRS Inc. makes leather purses targeted at professional women. While Shiva is devoted full time to the business, Jane and Rayna are lawyers with demanding careers. The three of them met in an undergraduate entrepreneurship class, and have been friends and business partners since then. JRS Inc. has been making profits and expanding. Shiva is not sure that he can pull this off without a full-time commitment from his two friends. Jane and Rayna are interested in making a full-time switch to the business if the income from the business is sufficiently high that they can give up their lucrative salaries. They want to dive deeper into the numbers and understand what different business conditions would mean for their bottom line. They would like the operating income to be around $1,500,000 to consider making a full-time switch. They have many questions that need to be answered. They asked Shiva to give them some data. Shiva provided them with the following details. JRS Inc. sells whatever it makes. There is no work in process or finished goods inventory. Shiva has collected some data relating to the most recent year. They incurred manufacturing costs of $3,240,000 during the recent year which includes $1,200,000 for materials, $800,000 for labor and $1,240,000 for other manufacturing costs (depreciation, factory rent and miscellaneous). The materials and the labor can be traced to each purse. The other manufacturing costs increase with the volume of purses but not in an exact proportion. JRS Inc. pays their sales staff commissions of 10% on the sales price. Their other general administrative expenses are $960,000 a year. JRS Inc. manufactured and sold 12,000 leather purses at a selling price of $500 per purse during the recent year. Shiva is considering expanding their product line by adding leather briefcases to their product line. The marketing consultant that Shiva hired concluded that there is demand for their leather purses and leather briefcases. What is the current profitability? Prepare an income statement for the company in a simplified functional format. Income Statement Format Sales Less: Cost of goods sold Gross margin Less: Selling, general & administrative expenses Operating Income Amounts Jane, Rayna, and Shiva started JRS Inc. together five years ago. JRS Inc. makes leather purses targeted at professional women. While Shiva is devoted full time to the business, Jane and Rayna are lawyers with demanding careers. The three of them met in an undergraduate entrepreneurship class, and have been friends and business partners since then. JRS Inc. has been making profits and expanding. Shiva is not sure that he can pull this off without a full-time commitment from his two friends. Jane and Rayna are interested in making a full-time switch to the business if the income from the business is sufficiently high that they can give up their lucrative salaries. They want to dive deeper into the numbers and understand what different business conditions would mean for their bottom line. They would like the operating income to be around $1,500,000 to consider making a full-time switch. They have many questions that need to be answered. They asked Shiva to give them some data. Shiva provided them with the following details. JRS Inc. sells whatever it makes. There is no work in process or finished goods inventory. Shiva has collected some data relating to the most recent year. They incurred manufacturing costs of $3,240,000 during the recent year which includes $1,200,000 for materials, $800,000 for labor and $1,240,000 for other manufacturing costs (depreciation, factory rent and miscellaneous). The materials and the labor can be traced to each purse. The other manufacturing costs increase with the volume of purses but not in an exact proportion. JRS Inc. pays their sales staff commissions of 10% on the sales price. Their other general administrative expenses are $960,000 a year. JRS Inc. manufactured and sold 12,000 leather purses at a selling price of $500 per purse during the recent year. Shiva is considering expanding their product line by adding leather briefcases to their product line. The marketing consultant that Shiva hired concluded that there is demand for their leather purses and leather briefcases. What is the current profitability? Prepare an income statement for the company in a simplified functional format. Income Statement Format Sales Less: Cost of goods sold Gross margin Less: Selling, general & administrative expenses Operating Income Amounts Jane, Rayna, and Shiva started JRS Inc. together five years ago. JRS Inc. makes leather purses targeted at professional women. While Shiva is devoted full time to the business, Jane and Rayna are lawyers with demanding careers. The three of them met in an undergraduate entrepreneurship class, and have been friends and business partners since then. JRS Inc. has been making profits and expanding. Shiva is not sure that he can pull this off without a full-time commitment from his two friends. Jane and Rayna are interested in making a full-time switch to the business if the income from the business is sufficiently high that they can give up their lucrative salaries. They want to dive deeper into the numbers and understand what different business conditions would mean for their bottom line. They would like the operating income to be around $1,500,000 to consider making a full-time switch. They have many questions that need to be answered. They asked Shiva to give them some data. Shiva provided them with the following details. JRS Inc. sells whatever it makes. There is no work in process or finished goods inventory. Shiva has collected some data relating to the most recent year. They incurred manufacturing costs of $3,240,000 during the recent year which includes $1,200,000 for materials, $800,000 for labor and $1,240,000 for other manufacturing costs (depreciation, factory rent and miscellaneous). The materials and the labor can be traced to each purse. The other manufacturing costs increase with the volume of purses but not in an exact proportion. JRS Inc. pays their sales staff commissions of 10% on the sales price. Their other general administrative expenses are $960,000 a year. JRS Inc. manufactured and sold 12,000 leather purses at a selling price of $500 per purse during the recent year. Shiva is considering expanding their product line by adding leather briefcases to their product line. The marketing consultant that Shiva hired concluded that there is demand for their leather purses and leather briefcases. What is the current profitability? Prepare an income statement for the company in a simplified functional format. Income Statement Format Sales Less: Cost of goods sold Gross margin Less: Selling, general & administrative expenses Operating Income Amounts

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Income Statement for JRS Inc Sales 6000000 Less Cost of Goo... View the full answer