Outdoor Amenities is a manufacturer of backyard and deck furniture. Its products are in high demand, and it carries no inventory. Following is a list of selected account balances from its trial balance for the most recent year ended December 31 (in no particular order.)
Salaries and wages (for administrative and sales staff) .................................... $ 37,400
Stain (used in manufacturing furniture) ........................................................... $ 12,700
Indirect labor costs (wages of maintenance workers in factory) ........................ $ 21,300
Other manufacturing overhead (includes factory insurance and property taxes) ... $ 9,800
Rent and utilities (for administrative offices) ................................................... $ 12,000
Utility costs (related to factory) ..................................................................... $ 11,200
Labor costs (wages of carpenters who build furniture) ..................................... $ 36,900
Accounts receivable .................................................................................... $ 27,100
Marketing costs .......................................................................................... $ 17,300
Wood (used in manufacturing furniture) ......................................................... $ 57,800
Sales revenues ...........................................................................................$ 255,000
Accounts payable ....................................................................................... $ 7,100
Requirements
Using the income statement accounts in the table, calculate:

1. Cost of goods sold.
2. Operating expenses.
3. Gross profit

COGS is direct manufacturing/ production expenses on goods produced. Operating Expenses includes all expenses (direct manufacturing & indirect sale expenses). Gross Profit is the excess of Net Sales over COGS

Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses - Closing Stock

= 0+ [Wood purchases +Account Payable (credit purchase)] + [stain + labour costs (mantainence and carpenters) + factory utility costs+ manfacturing overhead] + 0

= 57800 +7100 + 12700 + 21300 + 36900 + 11200 + 9800

= 156800

Gross Profit = Net Sales - COGS

= [Sales Revenue + Accounts Receivables] - COGS

= 255000 + 27100 - 156800

= 125300

Opereating Expenses = Direct Expenses + Indirect Expenses

= [Wood purchases +Account Payable (credit purchase)+ stain + labour costs (mantainence and carpenters) + factory utility costs+ manfacturing overhead] + [Staff Salaries & Wages + Administrative Rent & Utilities + Marketing Costs]

= 57800 +7100 + 12700 + 21300 + 36900 + 11200 + 9800 + 37400 + 12000 + 17300

= 223500

{COGS is direct manufacturing/ production expenses on goods produced} {Opereating Expenses includes all expenses (direct manufacturing & indirect sale expenses)}

{Gross Profit is the excess of Net Sales over COGS