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: Maribel Jessica Timothy Sale revenue $ 6 comma 000 $ 10 comma 700 $ 12 comma 350 Variable costs $ 5 comma 900 $ 7 comma 100 $ 12 comma 000 The business segments had the following number of customers: Maribel, 26 ; Jessica, 29 ; and Timothy, 35. The total fixed costs for the month amount to $ 3 comma 500. What is the operating income of Exceptional Events for the month of June? A. $ 100 B. $ 4 comma 050 C. $ 29 comma 050 D. $ 550

Question

Business

Iyana Michael

8 August, 16:42

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: Maribel Jessica Timothy Sale revenue $ 6 comma 000 $ 10 comma 700 $ 12 comma 350 Variable costs $ 5 comma 900 $ 7 comma 100 $ 12 comma 000 The business segments had the following number of customers: Maribel, 26 ; Jessica, 29 ; and Timothy, 35. The total fixed costs for the month amount to $ 3 comma 500. What is the operating income of Exceptional Events for the month of June? A. $ 100 B. $ 4 comma 050 C. $ 29 comma 050 D. $ 550

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Kamila Davies · Answer 1

Net operating income = $550

Explanation:

Giving the following information:

Maribel:

Sales = $6,000

Variable cost = $5,900

Contribution margin = $100

Jessica:

Sales = $10,700

Variable cost = $7,100

Contribution margin = $3,600

Timothy:

Sales = $12,350

Variable costs = $12,000

Contribution margin = $350

The total fixed costs for the month amount to $3,500.

Net operating income = contribution margin - fixed costs

Net operating income = (100 + 3,600 + 350) - 3,500 = $550