Question

Golf Clubs 'n Balls is a $16 million company with 1 president and the following number of sales reps in these two territories:
-Eastern U.S. ($12 million in sales, 11 reps)
-Western U.S. ($4 million in sales, 6 reps)

The company sells two types of products (and each rep sells both products):
-Golf clubs ($10 million in sales) and
-Golf balls ($6 million in sales).

And you can assume that the following list contains information on all other costs for this company:

• Each rep is paid a straight salary of $84,518
• The company president is paid a salary of $644,845
• They recently spent $239,636 for a national TV ad which focused on golf clubs only (not balls).
• Cost of goods sold is exactly 1/2 of sales (i.e., 50%)

Do a full cost analysis, allocate indirect costs as a percent of sales, in order to calculate the net profit generated by the company's line of golf clubs. Round to nearest dollar amount.

Answer 1