Bingimton Company
Bingimton Company provided the following information for last month. $$\begin{array} { l r }
\text { Production in units } & 1,000 \
\text { Direct materials cost } & \$ 3,000 \
\text { Direct labour cost } & \$ 4,000 \
\text { Manufacturing overhead cost } & \$ 7,600 \
\text { Sales commission per unit sold } & \$ 2 \
\text { Price per unit sold } & \$ 24 \
\text { Fixed selling and administrative expense } & \$ 5,000
\end{array}$$ There were no beginning and ending inventories.
-Refer to Bingimton Company. What was the operating income?

Question

Bingimton Company
Bingimton Company provided the following information for last month. $$\begin{array} { l r } 
\text { Production in units } & 1,000 \
\text { Direct materials cost } & \$ 3,000 \
\text { Direct labour cost } & \$ 4,000 \
\text { Manufacturing overhead cost } & \$ 7,600 \
\text { Sales commission per unit sold } & \$ 2 \
\text { Price per unit sold } & \$ 24 \
\text { Fixed selling and administrative expense } & \$ 5,000
\end{array}$$ There were no beginning and ending inventories.
-Refer to Bingimton Company. What was the operating income?

Quizplus · Accepted Answer

Operating income = Sales revenue - Cost of goods sold - Selling and administrative expensesSales revenue = 1,000 units * $24 per unit = $24,000Cost of goods sold = Direct materials cost + Direct labor cost + Manufacturing overhead cost = $3,000 + $4,000 + $7,600 = $14,600Selling and administrative expenses = Sales commission per unit sold * Number of units sold + Fixed selling and administrative expense = $2 per unit * 1,000 units + $5,000 = $7,000Operating income = $24,000 - $14,600 - $7,000 = $2,400

Bingimton Company Bingimton Company Provided the Following Information for Last

Bingimton Company
Bingimton Company Provided the Following Information for Last