Use the following information to determine net income in the financial statements under GAAP:

Number of boats to be sold 530
Upstream costs $5,150,000
Direct materials per boat $53,000
Direct labor per boat $33,000
Overhead per boat $23,000
Downstream costs $2,150,000

Assume the company wants to sell each boat for 25% more than the cost to produce the boat. Which of the following would be the sales price under GAAP and for internal decision purposes?

GAAP Internal Decision
a) $120,000 $136,800
b) $136,800 $136,800
c) $120,000 $114,000
d) $136,800 $114,000

Use the above information to determine net income in the financial statements under GAAP:
Assume the company wants to sell each boat for 20% more than the cost to produce the boat.

Multiple Choice

a. $10,000,000
b. $3,000,000
c. $7,000,000
d. $5,000,000