Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:

-What is operating income for 2011?
A)$450,000
B)$1,000,000
C)$750,000
D)$700,000

Question

Answer the following questions using the information below:
Meale Company makes a household appliance with model number X500. The goal for 2012 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012:
 
-What is operating income for 2011?
A)$450,000 
B)$1,000,000 
C)$750,000 
D)$700,000

Quizplus · Accepted Answer

The operating income for 2011 can be calculated as:
Operating income = Net sales - Cost of goods sold - Selling and administrative expenses
= $7,000,000 - $3,500,000 - $2,050,000
= $1,450,000 - $1,000,000 (depreciation and amortization expenses)
= $450,000

The best choice(s) cannot be determined as there is no question or prompt provided.

Answer the Following Questions Using the Information Below