Question

Assume the following information for a merchandising company:

Net operating income
$ 21,000
Variable selling expenses
$ 25,000
Cost of goods sold
$250,000
Fixed administrative expenses
$ 50,000
Fixed selling expenses
$ 40,000
Variable administrative expenses
$ 5,000
What are the company's sales?
Multiple Choice
-$391,000
-$370,000

Answer 1

By adding together the net operating income and various expenses, we can determine that the company's sales are $391,000.

Step-by-step explanation:

To determine the company's sales, we need to add the net operating income and all the expenses to find the total sales. The company's sales can be calculated using the formula:

Sales = Net Operating Income + Variable Selling Expenses + Cost of Goods Sold + Fixed Administrative Expenses + Fixed Selling Expenses + Variable Administrative Expenses

Plugging in the provided numbers:

Sales = $21,000 + $25,000 + $250,000 + $50,000 + $40,000 + $5,000

Sales = $391,000

Therefore, the company's sales are $391,000.