It costs Homer's Manufacturing $0.85 to produce baseballs and Homer sells them for $7 a...
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Accounting
It costs Homer's Manufacturing $0.85 to produce baseballs and Homer sells them for $7 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $16,000 a month rent for his factory and store, and also pays $80,000 a month to his staff in addition to the commissions. Homer sold 72,500 baseballs in June. If Homer prepares a traditional income statement for the month of June, what would be his operating income?
A. $445,875
B. $324,500
C. $567,250
D. $507,500
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