Classic Coolers manufactures portable coolers adorned with college logos. During

Question

Classic Coolers manufactures portable coolers adorned with college logos. During the first quarter of the year, the company had the following costs: Direct materials used $55,500 Direct labor 30,500 Factory rent 65,500 Factory equipment depreciation 13,500 Office equipment depreciation 1,300 Marketing expenses 5,100 Administrative expenses 15,500 The company had no beginning or ending work in process inventory and no beginning finished-goods inventory. Although 7,000 units were started and finished during the quarter, just 4,300 were sold, for an average price of $33 each. Required: Calculate Classic Coolers' operating income for the first quarter. If required, round your interim calculations to the nearest whole number.

Explanation / Answer

net sales = 4300*33 = 141900 expenses DM = 55000 DL = 30500 FR = 65500 depreciation = 14800 marketing + administ = 20600 total = 186400 cost of goods sold = 186400*4300/7000 = 114502.85 operating income = 141900-114502.8 = 27397

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