It Costs Homer's Manufacturing $0

It costs Homer's Manufacturing $0.65 to produce baseballs and Homer sells them for $5.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $17,000 a month rent for his factory and store, and also pays $78,000 a month to his staff in addition to the commissions. Homer sold 70,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his operating income?

A) $384,050
B) $352,500
C) $63,450
D) $194,050

Correct Answer:

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