Toby's Farm Store Buys Portable Generators for $500 and Sells

question 335

Multiple Choice

Toby's Farm Store buys portable generators for $500 and sells them for $800. He pays a sales commission of 5% of sales revenue to his sales staff. Toby pays $2,000 a month rent for his store, and also pays $1,800 a month to his staff in addition to the commissions. Toby sold 200 generators in June.
-If Toby prepares a contribution margin income statement for the month of June, what would be his operating income?

• A) $48,200
• B) $108,000
• C) $160,000
• D) $56,000

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Definitions:

Monocot

A group of flowering plants that have a single embryonic leaf, or cotyledon, in their seeds.

Coleoptile

The protective sheath covering the emerging shoot in monocotyledons, such as grasses and cereals.

Ovary Wall

The outer layer of the ovary that encloses the ovules in plants or the area in female animals where eggs are produced.

Fruit

The mature ovary of a flowering plant, usually containing seed(s), that can be eaten as food or used to propagate the plant.