Question

The following information has been provided by Hale Company: • Advertising expense $8,800; • Interest expense $3,800; • Rent expense for store $18,000; • Loss on sale of property and equipment $6,600; • Cost of goods sold $22,200; • Depreciation expense $8,000; • Prepaid insurance $1,900. How much were Hale’s total expenses in calculating operating income?

Answer 1

Answer:

Hale’s total expenses in calculating operating income is $57000

Explanation:

Operating income represents profit realized in carrying out Hale Company primary activities

Only expenses incurred in are considered in calculation of Hale`s Operating Income

Cost of Sales

Cost of goods sold                        22200              

Administration

Rent expenses for store                18000

Depreciation                                    8000

Selling and distribution expenses

Advertising                                       8800

Total Expenses                               57000