The Cumberland Company provides the following information: $\begin{array} { l }
\text {Sales (250,000 units) }&\$625,000\
\text {Manufacturing costs: }&\
\text {Variable }&212,500\
\text { Fixed}&37,500\
\text {Selling and administrative costs: }&\
\text {Variable }&100,000\
\text { Fixed}&25,000\
\end{array}$

What is the operating income for Cumberland?

Question

The Cumberland Company provides the following information: $\begin{array} { l  }
 \text {Sales (250,000 units) }&\$625,000\
 \text {Manufacturing costs: }&\
 \text {Variable }&212,500\
 \text { Fixed}&37,500\
 \text {Selling and administrative costs: }&\
 \text {Variable }&100,000\
 \text { Fixed}&25,000\
\end{array}$

What is the operating income for Cumberland?

Quizplus · Accepted Answer

Operating income is calculated by subtracting total expenses from sales. Total expenses include both manufacturing costs (variable and fixed) and selling and administrative costs (variable and fixed). The calculation is as follows: Sales - (Variable manufacturing costs + Fixed manufacturing costs + Variable selling and administrative costs + Fixed selling and administrative costs) = Operating income. Thus, $625,000 - ($212,500 + $37,500 + $100,000 + $25,000) = $625,000 - $375,000 = $250,000.

The Cumberland Company Provides the Following Information What Is the Operating Income for Cumberland? A)$625,000 B)$312,500 C)$250,000

The Cumberland Company Provides the Following Information What Is the Operating Income for Cumberland?
A)$625,000
B)$312,500
C)$250,000