Tigor Enterprises Has Sales Revenue of $340,000 for 20xx

question 58

Multiple Choice

Tigor Enterprises has sales revenue of $340,000 for 20xx. Its product sells for $12 and has a 20 percent contribution margin. Fixed costs are $21,000. What is Tigor Enterprises' operating income for 20xx?

• A) $56,000
• B) $40,000
• C) $52,000
• D) $47,000

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, including costs related to operating the factory that are not directly tied to producing specific products.

Raw Materials

Basic materials that are used in the production process as inputs for manufacturing finished goods.

Indirect Materials

Components or supplies used in the production process that cannot be directly traced to a finished product.

Manufacturing Overhead

All indirect costs associated with manufacturing a product, excluding direct material and direct labor costs.