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Ormand Company uses variable costing for internal decision-making purposes and has the following information for June: Sales $900,000 Variable cost of goods sold 440,000 Fixed manufacturing costs 160,000 Variable selling and administrative expenses 100,000 Fixed selling and administrative expenses 70,000 Determine the income from operations for June.

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Answer:

$130000

Step-by-step explanation:

Given: Sales revenue= $900000.

Variable cost of goods sold= $440000.

Fixed manufacturing cost= $160000

Variable selling and administration expense= $100000.

Fixed selling and administrative expense= $70000.

Now, finding the income from operation for June.

Formula; Income from operation=
Revenue- cost\ of\ goods\ sold- administrative\ expense

⇒ Income from operation=
\$ 900000- \$ 440000-\$ 160000- (\$ 100000+\$ 70000)

⇒ Income from operation=
\$ 900000- \$ 600000- \$ 170000

⇒ Income from operation=
\$ 900000 - \$ 770000

∴ Income from operation=
\$ 130000

Hence, $130000 is the income from operation for June.

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