Chapter 16, Problem 16.16EX

(a)

To determine

Cost of goods sold:

Cost of goods sold is the accumulate total of all direct cost incurred in manufacturing the goods or the products which has been sold during a period. Cost of goods sold involves direct material, direct labor, and manufacturing overheads.

Net income:

Net income is the total earnings generated by the company. Net income is calculated by deducting the operating expenses from the earnings (Profit).

$\boxed{\text{Net}\text{income = Gross profit – operating expenses}}$

Gross Profit:

Gross Profit is the difference between the net sales, and the cost of goods sold. Gross profit usually appears on the income statement of the company.

To determine: The cost of goods sold for the month ended October 31, 2016.

(b)

To determine

The gross profit.

(c)

To determine

The net income.