Premium Beds is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below.If 4,000 bed frames were sold, Premium Bed's operating income (πB) would be:

Question

Quizplus · Accepted Answer

Using the information provided in the table, we can calculate the operating income using the given formula:
πB = (P × Q) - (Vc × Q) - F
πB = ($800 × 4,000) - ($410 × 4,000) - $190,000
πB = $3,200,000 - $1,640,000 - $190,000
πB = $1,370,000 - $190,000
πB = $1,180,000
Therefore, if 4,000 bed frames were sold, Premium Bed's operating income would be $1,200,000 (closest to option C).

Premium Beds Is a Retailer of Luxury Bed Frames Located