Dixon,Inc.uses a standard cost system.On December 31,the last day of the accounting period,the account balances include the following: What is the net operating income on a standard cost income statement of the company for the year ended December 31?
A)$8,780
B)$6,290
C)$8,470
D)$7,530

Question

Dixon,Inc.uses a standard cost system.On December 31,the last day of the accounting period,the account balances include the following:  What is the net operating income on a standard cost income statement of the company for the year ended December 31?
A)$8,780 
B)$6,290 
C)$8,470 
D)$7,530

Quizplus · Accepted Answer

Net operating income can be calculated using the formula: sales - cost of goods sold - operating expenses. Based on the given account balances, the standard cost of goods sold is $41,520 (4800 units x $8.65 per unit). The operating expenses are $22,800 (including selling expenses and administrative expenses). Therefore, the net operating income is $7,530 ($72,000 - $41,520 - $22,800). The answer is option D.

Dixon,IncUses a Standard Cost System