Crystal, Inc is a merchandiser of stone ornaments
The company sold 8,000 units during the year. The company has provided the following information:
Sales Revenue $593,000
Purchases (excluding Freight In) 304,000
Selling and Administrative Expenses 68,000
Freight In 14,000
Beginning Merchandise Inventory 46,000
Ending Merchandise Inventory 42,000
What is the operating income for the year? (Round your answer to the nearest cent.)
A) $203,000
B) $322,000
C) $271,000
D) $525,000
A .A) Cost of Goods Sold = Beginning Merchandise Inventory + Purchases + Freight In - Ending Merchandise Inventory = $46,000 + $304,000 + $14,000 - $42,000 = $322,000
Operating Income = Sales Revenue - Cost of Goods Sold - Selling and Administrative Expenses = $593,000 - $322,000 - $68,000 = $203,000
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