FlorDirect, a floral delivery company, has the following income statement for 2013. In 2014, prices increase to $7.15 as a result of inflation. This company uses a FIFO inventory system. Thus, old inventory is charged off at $5 per unit. Selling administrative expenses will be 10% of sales and depreciation remains unchanged. Compute the after-tax income.
Sales ------ $ 136,000 ( 20 units at $6.82)
COGS ---- 100,000 (units at $5.00)
Gross profit ------ 36,400
Sellong and adm expenses ---- 13,640
Depreciation ----- 7,000
Operating profit ------ 15,760
Taxes (30%) ---- 4,728
Aftertax income ----- $11,032
A) $43,000
B) $22,190
C) 21,700
D) $15,190
E) None of the above