Answer:
Net Operating Income $ 10700
Explanation:
Chase Toys
Operating Income
For the month ended November 30, 2013.
Sales Revenue $ 106,500
Direct materials used 32,000
Direct Labor 16,000
Manufacturing overhead* 17,000
Total Manufacturing Costs 65000
Add Beginning work-in-process 8,000
Cost of Goods Available for Manufacture 73000
Less Ending work-in-process 6,000
Cost of Goods Manufactured 67000
Add Finished goods, Nov. 1, 2013 4,000
Cost of Goods Available for Sale 71000
Less Finished goods, Nov. 30, 2013 7,200
Cost of Goods Sold 63,800
Gross Profit 42700
Less Operating expenses 32,000
Net Operating Income $ 10700
Manufacturing head consists of indirect production costs. We subtract the operating expenses to get the operating income.
