Happy Home, Inc. provides housekeeping services. The following financial data have been provided. $$\begin{array} { | l | r |}
\hline \text { Service Revenue } & \$ 80,000 \
\hline \text { Cleaning Supplies Used } & 21,500 \
\hline \text { Wages Expense } & 18,350 \
\hline \text { Office Rent Expense } & 5350 \
\hline \begin{array} { l }
\text { Depreciation Expense- } \
\text { Machinery }
\end{array} & 750 \
\hline
\end{array}$$ Calculate the operating income for the company.

Question

Happy Home, Inc. provides housekeeping services. The following financial data have been provided. $$\begin{array} { | l | r |} 
\hline \text { Service Revenue } & \$ 80,000 \
\hline \text { Cleaning Supplies Used } & 21,500 \
\hline \text { Wages Expense } & 18,350 \
\hline \text { Office Rent Expense } & 5350 \
\hline \begin{array} { l } 
\text { Depreciation Expense- } \
\text { Machinery }
\end{array} & 750 \
\hline
\end{array}$$ Calculate the operating income for the company.

Quizplus · Accepted Answer

Operating income is calculated by subtracting all operating expenses from the service revenue. Here, the total expenses are the sum of cleaning supplies used ($21,500), wages expense ($18,350), office rent expense ($5,350), and depreciation expense-machinery ($750), which equals $46,950. Subtracting this from the service revenue ($80,000) gives an operating income of $33,050, which is not an option provided. However, the correct calculation should be: $80,000 (Service Revenue) - $21,500 (Cleaning Supplies Used) - $18,350 (Wages Expense) - $5,350 (Office Rent Expense) - $750 (Depreciation Expense) = $34,050. It appears there was a mistake in my initial calculation. The correct answer, based on the correct subtraction, is indeed $34,050, which corresponds to option C.

Happy Home, Inc Calculate the Operating Income for the Company