Question

Tyler Company has the following information pertaining to its two product lines for last year: Product A Product B Variable selling and admin. expenses $38,000 $31,000 Direct fixed expenses 19,500 34,500 Sales 250,000 210,000 Direct fixed selling and admin. expenses 38,000 22,000 Variable expenses 42,000 31,000 Operating income $112,500 $91,500 Common expenses are $105,000 for the year.

What is the income for Tyler Company?
a. $99,000
b. $102,500
c. $101,000
d. $120,500

Answer 1

option (a) $99,000

Step-by-step explanation:

Data provided in the question:

Product A Product B

Variable selling and admin expenses $38,000 $31,000

Direct fixed expenses $19,500 $34,500

Sales $250,000 $210,000

Direct fixed selling and admin expenses $38,000 $22,000

Variable expenses $42,000 $31,000

Operating income $112,500 $91,500

Common expenses are $105,000 for the year

Now,

Income = Total Operating Income - Common Expense

or

Income = ( $112,500 + $91,500 ) - $105,000

or

Income = $99,000

Hence, the correct answer is option (a) $99,000