Question

Revenue $ 460 comma 000 Beginning inventory of direct​ materials, January​ 1, 2015 23 comma 000 Purchases of direct materials 15 comma 200 Ending inventory of direct​ materials, December​ 31, 2015 14 comma 000 Direct manufacturing labor 27 comma 000 Indirect manufacturing costs 43 comma 000 Beginning inventory of finished​ goods, January​ 1, 2015 49 comma 000 Cost of goods manufactured 94 comma 200 Ending inventory of finished​ goods, December​ 31, 2015 41 comma 000 Operating costs 153 comma 000 What is​ Expert's operating​ income?

Answer 1

Answer:

$204,800

Explanation:

First, we need to calculate Cost of Good sold

Cost of good sold (COGS) = (Beginning inventory of finished good + Cost of goods manufactured - Ending inventory of finished good)

= 49000 + 94200 - 41000 = 102,200

--> Gross profit = Revenue - COGS = 460,000 - 102,200 = 357,800

Operating income = Gross profit - Operating costs = 357,800 - 153,000 = 204,800