Question

Rogue Industries reported the following items for the current​ year: Sales​ = $3,000,000; Cost of Goods Sold​ = $1,500,000; Depreciation Expense​ = $170,000; Administrative Expenses​ = $150,000; Interest Expense​ = $30,000; Marketing Expenses​ = $80,000; and Taxes​ = $300,000.​ Rogue's operating income is equal to

A) $770,000.
B) $1,070,000.
C) $1,100,000.
D) $1,500,000

Answer 1

Answer: Option (C) is correct.

Explanation:

Given that,

Sales​ = $3,000,000

Cost of Goods Sold​ = $1,500,000

Depreciation Expense​ = $170,000

Administrative Expenses​ = $150,000

Interest Expense​ = $30,000

Marketing Expenses​ = $80,000

Taxes​ = $300,000

Operating Income = Sales​ - Cost of Goods Sold​ - Depreciation Expense - Administrative Expenses - Marketing Expenses

= $3,000,000 - $1,500,000 - $170,000 - $150,000 - $80,000

= $1,100,000

Answer 2

Answer: Rogue's operating income is equal to $1,100,000

Step-by-step explanation:

Given:

Sales​ = $3,000,000;

Cost of Goods Sold​ = $1,500,000;

Depreciation Expense​ = $170,000;

Administrative Expenses​ = $150,000;

Interest Expense​ = $30,000;

Marketing Expenses​ = $80,000;

Taxes​ = $300,000

We can compute operating income as :

Operating income = Sales - Cost of goods sold - (depreciation expenses + administrative expenses + marketing expenses)

Operating income = $3,000,000 - $1,500,000 - ($170,000 + $150,000 + $80,000)

Operating income = $1,100,000

Therefore the correct option is (c)