Crystal,Inc.is a merchandiser of stone ornaments.The company sold 6,000 units during the year.The company has provided the following information: $$\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 589,000 \
\hline \text { Purchases (excluding Freight In) } & 305,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 44,000 \
\hline \text { Ending Merchandise Inventory } & 42,000 \
\hline
\end{array}$$ What is the operating income for the year? (Round your answer to the nearest whole dollar.)
A) $198,000
B) $322,000
C) $267,000
D) $520,000

Question

Crystal,Inc.is a merchandiser of stone ornaments.The company sold 6,000 units during the year.The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 589,000 \
\hline \text { Purchases (excluding Freight In) } & 305,000 \
\hline \text { Selling and Administrative Expenses } & 69,000 \
\hline \text { Freight In } & 15,000 \
\hline \text { Beginning Merchandise Inventory } & 44,000 \
\hline \text { Ending Merchandise Inventory } & 42,000 \
\hline
\end{array}$$ What is the operating income for the year? (Round your answer to the nearest whole dollar.)
A) $198,000
B) $322,000
C) $267,000
D) $520,000

Quizplus · Accepted Answer

Operating income is calculated as Sales Revenue minus Cost of Goods Sold (COGS) and Selling and Administrative Expenses. COGS is calculated as Beginning Inventory + Purchases + Freight In - Ending Inventory. Thus, COGS = $44,000 + $305,000 + $15,000 - $42,000 = $322,000. Operating income = Sales Revenue - COGS - Selling and Administrative Expenses = $589,000 - $322,000 - $69,000 = $198,000.

Crystal,Inc What Is the Operating Income for the Year? (Round Your