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Jo builds and sells robots using component parts purchased from a supplier and assembled and painted in Jo's factory. The boats sell for $1,200 each. Component parts cost $400 per boat, and each boat requires 12 labor hours to assemble at a cost of $14 per hour. Jo's factory is rented for $2,000 per month, which includes utilities. Jo receives a salary of $3,000 per month. The boats are sold by outside sales representatives who receive a 5% sales commission. 80 boats were produced and 75 sold during 2011. Prepare a GAAP compliant income statement.
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Corben Inc. has a successful brand with the name Crunz. The market size in which Crunz competes is $4 billion, and Crunz has generated sales of $400 million. It has a contribution margin of 30% and annual fixed costs of $20 million.
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