Rapid Cabinet Makers Inc. provided the following information for last month:

If sales reduce to half the amount in the next month, what is the projected operating income?
A) $1,000
B) $6,000
C) $4,500
D) $18,500

Question

Rapid Cabinet Makers Inc. provided the following information for last month:

If sales reduce to half the amount in the next month, what is the projected operating income?
A) $1,000 
B) $6,000 
C) $4,500 
D) $18,500

Quizplus · Accepted Answer

Projected operating income = ($25,000 × 0.5) - ($10,000 × 0.5) - $3,000 = $4,500