Figure 2-7

question 147

Multiple Choice

Figure 2-7. Gateway Company produces a product with the following per-unit costs:
Last year,Gateway produced and sold 750 units at a sales price of $68 each.Total selling and administrative expense was $22,000.
Refer to Figure 2-7.Total operating income last year was?

• A)$29,000
• B)$51,000
• C)$25,500
• D)$3,500

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, representing the company's profitability over a specified period.

Return on Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested, expressed as a percentage.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest in the company.

Gross Margin Percentage

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, demonstrating the efficiency of a company in managing its production costs relative to sales.