Sandi Scott obtained a patent on a small electronic device and organized Scott P

Friday July 22, 2022

Sandi Scott obtained a patent on a small electronic device and organized Scott Products Inc. to produce and sell the device. During the first month of operations the device was very well received on the market so Ms. Scott looked forward to a healthy profit. For this reason she was surprised to see a loss for the month on her income statement. This statement was prepared by her accounting service which takes great pride in providing its clients with timely financial data. The statement follows:Scott Products Inc. Income StatementSales (40000)$200000Variable expenses:Variable cost of goods sold$80000Variable selling and administrative expenses30000110000Contribution margin90000Fixed expenses:Fixed manufacturing overhead75000Fixed selling and administrative expenses2000095000Net operating loss$(5000)


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