Bingimton Company provided the following information for last month.There were no beginning and ending inventories.
$\begin{array}{lr}
\text { Production in units } & 1,000 \
\text { Direct materials cost } & \$ 3,000 \
\text { Direct labour cost } & \$ 4,000 \
\text { Overhead cost } & \$ 7,600 \
\text { Sales commission per unit sold } & \$ 2 \
\text { Price per unit sold } & \$ 24 \
\text { Fixed selling and admini strative expense } & \$ 5,000
\end{array}$
-Refer to the Figure.What was the operating income for Bingimton Company last month?

Question

Bingimton Company provided the following information for last month.There were no beginning and ending inventories.
 $\begin{array}{lr}
\text { Production in units } & 1,000 \
\text { Direct materials cost } & \$ 3,000 \
\text { Direct labour cost } & \$ 4,000 \
\text { Overhead cost } & \$ 7,600 \
\text { Sales commission per unit sold } & \$ 2 \
\text { Price per unit sold } & \$ 24 \
\text { Fixed selling and admini strative expense } & \$ 5,000
\end{array}$
-Refer to the Figure.What was the operating income for Bingimton Company last month?

Quizplus · Accepted Answer

Operating income is calculated by subtracting total expenses from total revenue. Total revenue is 1,000 units * $24 = $24,000. Total expenses include direct materials ($3,000), direct labor ($4,000), overhead cost ($7,600), sales commission (1,000 units * $2 = $2,000), and fixed selling and administrative expense ($5,000), summing up to $21,600. Therefore, operating income = $24,000 - $21,600 = $2,400.

Bingimton Company Provided the Following Information for Last Month -Refer to the Figure