Answer:
The firm’s operating profit is $127,000
Explanation:
The operating profit i an element in the income statement obtained after the deduction of the operating expenses from the gross income. The gross income is the difference between the sales and cost of sales.
As such
Given;
sales = $2,160,000
Cost of goods sold = $1,550,000
Gross income = $2,160,000 - $1,550,000
= $610,000
Selling and administrative expenses = 10% × $2,160,000 = $216,000
Depreciation = 6% × $4,450,000 = $267,000
Operating profit = $610,000 - $216,000 - $267,000
= $127,000
