The following information was taken from the accounting records of Elliott Manufacturing Corp. Unfortunately, some of the data were destroyed by a computer malfunction.$\begin{array}{lr}
\text { Sales Revenue } & \$ 58,000 \
\text { Finished Goods Inventory, Beginning } & 9,000 \
\text { Finished Goods Inventory, Ending } & 6,000 \
\text { Cost of Goods Sold } & ? \
\text { Gross Margin } & 25,000 \
\text { Direct Materials Used } & 10,000\
\text { Selling and Administrative Expense } & ? \
\text { Operating Income } & 14,000 \
\text { Work-in-Process Inventory, Beginning } & ? \
\text { Work-in-Process Inventory, Ending } & 5,000 \
\text { Direct Labor Used } & 9,000 \
\text { Factory Overhead } & 12,000 \
\text { Total Manufacturing Cost } & ? \
\text { Cost of Goods Manufactured } & ?
\end{array}$Selling and administrative expenses are calculated to be:
A)$4,000.
B)$9,000.
C)$11,000.
D)$12,000.
E)$16,000.

Question

Quizplus · Accepted Answer

The operating income is calculated as Sales Revenue - Cost of Goods Sold - Selling and Administrative Expenses. Given that the Gross Margin is $25,000, the Cost of Goods Sold is $58,000 - $25,000 = $33,000. Therefore, Operating Income = $58,000 - $33,000 - Selling and Administrative Expenses = $14,000. Solving for Selling and Administrative Expenses gives $11,000.

The Following Information Was Taken from the Accounting Records of Elliott