Income Computation for a Manufacturing Firm The following data relate to GenMet,

ID: 2425364 • Letter: I

Question

Income Computation for a Manufacturing Firm The following data relate to GenMet, a U.S. based consumer goods manufacturing firm, for the fiscal year ending October 31, 2013. Reported amounts are in millions of U.S. dollars ($). GenMet incurred manufacturing costs (direct material, direct labor, manufacturing overhead) during fiscal 2013 totaling $2,752.0. Sales revenue was $6,700.2, selling and administrative expenses were $2,903.7, and interest expense was $151.9. The income tax rate is 35%. Compute GenMet's net income for fiscal year 2013. Round your calculations and answer to one decimal place. Enter the amount in millions.

October 31, 2013 October 31, 2012 Raw Materials Inventory $101.5 $73.7 Work-in-process Inventory $119.1 $100.8 Finished Goods Inventory $322.3 $286.2

Explanation / Answer

October 31, 2013

October 31, 2012

Raw Materials Inventory

$101.5

$73.7

Work-in-process Inventory

$119.1

$100.8

Finished Goods Inventory

$322.3

$286.2

Sales revenue 6,700.2

Less:Cost of goods sold 2,834.2

Manufacturing cost 2,752

Inventory cost (27.8+18.3+36.1) 82.2

Less: selling and administrative expenses 2,903.7

Net operating income 962.3

Less: Interest expense $151.9

Net income after interest before tax 810.4

Income tax @ 35 % 283.64

Net income after interest and tax 526.76