Question

The following information has been provided by A Company: • Advertising expense $9,900 • Rent expense for store $12,000 • Loss on sale of property and equipment $5,700 • Cost of goods sold $21,300 • Depreciation expense $7,100 • Prepaid insurance $1,000 How much were this company's total expenses in calculating operating income

Answer 1

$50,300

Step-by-step explanation:

Operating expenses only include the direct expenses.

These include:

Advertising expense = $9,900

Rent Expense = $12,000

Cost of goods sold = $21,300

Depreciation expense = $7,100

Total operating expense = $50,300

Depreciation is directly related as to the operations as it states the use of machinery for production of goods, use of building for space, etc: