Merline, a one-product mail-order firm, buys its product for $75 per unit and sells it...
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Merline, a one-product mail-order firm, buys its product for $75 per unit and sells it for $150 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE COMPANY Income Statement For Month Ended December 31, 2013 Sales $ 2,250,000 Cost of goods sold 1,125,000 Gross profit 1,125,000 Expenses Sales commissions (10%) 225,000 Advertising 250,000 Store rent 30,000 Administrative salaries 45,000 Depreciation 50,000 Other expenses 10,000 Total expenses 610,000 Net income $ 515,000 Management expects December
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