Consider the following year-end information for Spitzer Corporation:
What amount will Spitzer report for operating income?

Question

Quizplus · Accepted Answer

Operating income = Gross profit – Operating expenses.
Given,
Net sales = $600,000
Cost of goods sold = $240,000
Gross profit = Net sales – Cost of goods sold = $360,000
Operating expenses = $150,000 + $50,000 + $10,000 = $210,000
Operating income = Gross profit – Operating expenses = $360,000 – $210,000 = $150,000
Therefore, the answer is B) $210,000.

Consider the Following Year-End Information for Spitzer Corporation