Answer:
1. Total Revenue in May $ 175,000
2. Total Salaries & wages For May $ 88500
3. Total Travel Expenses for May $21,000
4. Other Expense $ 36,000
5. Operating Income $ 65,500
Explanation:
Given
Adger Corporation
Fixed Element Variable Element Actual Total
per Month per Customer Served for May
Revenue $5,000 $160,000
Employee Salaries
& wages $50,000 $1,100 $88,000
Travel expenses $600 $19,000
Other expenses $36,000 $34,500
<u><em>There were 35 customers.</em></u>
<u><em>Revenue = $5000 per customer</em></u>
<u><em>We can easily calculate as we have been given the number of customers and the variable element of expense per customer.</em></u>
1. Total Revenue in May = 5000 * 35= $ 175,000
Variable Salaries & wages = $ 1100 per customer
Total Variable Salaries & wages = $ 1100 *35= $ 38500
2. Total Salaries & wages For May = Variable + Fixed
= $ 38500 + $50,000= $ 88500
Travel expenses = $600per customer
3. Total Travel Expenses for May = $ 600 *35= $21,000
4. Other Expense = Fixed Expenses = $ 36,000 ( there are no variable expenses)
5. Operating Income= Revenue - Employee Salaries - Travel Expenses
= $ 175,000- $ 88500 - $ 21,000= $ 65,500
<em>Other expenses are included in the net income statement not operating income statement.</em>
