Asked by Taylor Chisholm on Jul 17, 2024
Verified
According to the company's accounting system, what is the net operating income earned by product D74F? Include all costs in this calculation-whether relevant or not.
A) ($58,000)
B) ($440,000)
C) $58,000
D) $440,000
Net Operating Income
Income generated from normal business operations, excluding taxes and interest.
Relevant Costs
Costs that will be affected by a decision in the future and are pertinent to a specific business decision.
- Evaluate the economic consequences of ceasing a product's availability.
Verified Answer
EA
Elisa AfiouniJul 20, 2024
Final Answer :
A
Explanation :
The question asks for net operating income, which is calculated as total revenue minus total expenses. Based on the information given in the question, the total revenue for product D74F is $70,000 and the total expenses are $128,000. Therefore, the net operating income for product D74F is -$58,000 (which is choice A). It is important to include all costs in this calculation, even if they are not relevant to the product.
Explanation :
Learning Objectives
- Evaluate the economic consequences of ceasing a product's availability.
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