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15 August, 21:34

Revenue $460,000 beginning inventory of direct materials, january 1, 2015 30,000 purchases of direct materials 15,800 ending inventory of direct materials, december 31, 2015 16,000 direct manufacturing labor 26,000 indirect manufacturing costs 42,000 beginning inventory of finished goods, january 1, 2015 45,000 cost of goods manufactured 97,800 ending inventory of finished goods, december 31, 2015 41,000 operating costs 158,000 what is expert's operating income?

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  1. 15 August, 23:50
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    Answer: Expert's Operating Income = $200,200

    Explanation: Expert has the following information from the Profit and Loss account:

    Revenue: $460,000

    Beginning Inventory of finished goods as on January 1, 2015: $45,000

    Cost of Goods Manufactured: $97,800

    Ending Inventory of Finished Goods as on December 31,2015 : $41,000

    Operating Costs: $158,000

    Operating Income = Revenue - (Beginning Inventory of Finished Goods + Cost of Goods Manufactured - Ending Inventory of Finished Goods) - Operating Costs

    By Input the above variables in the formula,

    Operating Income = $460,000 - ($45,000 + $97,800 - $41,000) - $158,000

    Operating Income = $200,200

    Therefore, the Expert's Operating Income is $200,200
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