Frazer Corp sells several products. Information of average revenue and costs is as follows:

What is the operating income earned if the company sells 20,000 units?
A) $279,000
B) $296,000
C) $325,000
D) $227,000

Question

Frazer Corp sells several products. Information of average revenue and costs is as follows:

What is the operating income earned if the company sells 20,000 units?
A) $279,000 
B) $296,000 
C) $325,000 
D) $227,000

Quizplus · Accepted Answer

Contribution = $28.5 - $6.00 - $1.45 - $0.85 - $2.60 = $17.6 × 20,000 = $352,000
Operating income = $352,000 - $125,000 = $227,000

Frazer Corp Sells Several Products