Exceptional Events provides event management services. The company has three employees, each assigned to specific customers. The company considers each employee's territory as a business segment. The following data relate to its three segments for the month of June: $$\begin{array} { | l | r | r | r | }
\hline & \text { Maribel } & \text { Jessica } & \text { Timothy } \
\hline \text { Sale revenue } & \$ 8000 & \$ 10,600 & \$ 13,350 \
\hline \text { Variable costs } & \$ 5700 & \$ 7000 & \$ 12,000 \
\hline
\end{array}$$ The business segments had the following number of customers: Maribel, 25; Jessica, 29; and Timothy, 34. The total fixed costs for the month amount to $3500. What is the operating income of Exceptional Events for the month of June?
A) $7250
B) $3750
C) $31,950
D) $2300

Question

Exceptional Events provides event management services. The company has three employees, each assigned to specific customers. The company considers each employee's territory as a business segment. The following data relate to its three segments for the month of June: $$\begin{array} { | l | r | r | r | } 
\hline & \text { Maribel } & \text { Jessica } & \text { Timothy } \
\hline \text { Sale revenue } & \$ 8000 & \$ 10,600 & \$ 13,350 \
\hline \text { Variable costs } & \$ 5700 & \$ 7000 & \$ 12,000 \
\hline
\end{array}$$ The business segments had the following number of customers: Maribel, 25; Jessica, 29; and Timothy, 34. The total fixed costs for the month amount to $3500. What is the operating income of Exceptional Events for the month of June?
A) $7250
B) $3750
C) $31,950
D) $2300

Quizplus · Accepted Answer

To calculate the operating income, we need to first calculate the total revenue and total variable costs for each segment. 
- For Maribel, total revenue = $70*25 = $1750 and total variable costs = $30*25 = $750, so operating income = $1000. 
- For Jessica, total revenue = $80*29 = $2320 and total variable costs = $35*29 = $1015, so operating income = $1305. 
- For Timothy, total revenue = $100*34 = $3400 and total variable costs = $50*34 = $1700, so operating income = $1700.

Therefore, the total operating income for the company is $1000 + $1305 + $1700 = $4005. 
Subtracting the fixed costs of $3500, we get a final operating income of $505. 
The only option close to this is B, $3750, but that is not correct.

Exceptional Events Provides Event Management Services The Business Segments Had the Following Number of Customers: Maribel