Ames Power Point Had Sales in October of $28,000,000 for Its

question 199

Essay

Ames Power Point had sales in October of $28,000,000 for its three stores in Toronto.The beginning merchandise inventories for October and November were $5,000,000 and $4,000,000, respectively.October purchases totalled $19,000,000.All sales are on account (terms 2/15, net 30 days)and are collected 50 percent in the month of the sale and 50 percent in the following month.One-half of all sales discounts are taken for a total of $265,000.September sales totalled $25,000,000 while November sales were $30,000,000.Additional information for October is as follows: Required:
Using an appropriately formatted income statement, determine the operating income of the company.

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Definitions:

Output

The total amount of goods or services produced by an individual, firm, or country.

Average Fixed Costs

The total fixed expenses of a business divided by the quantity of units produced, decreasing as production increases.

Variable Costs

Variable Costs are expenses that change in direct proportion to the volume of output or activity in a business, such as materials and labor.