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Blue River Enterprise sold 5000 products at $223 each, but 120 of them were returned for...

Blue River Enterprise sold 5000 products at $223 each, but 120 of them were returned for full refunds. If cost of goods sold equals 12% of net sales, and operating expenses are $145,000, how much would be the operating income?

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Answer #1
Statement for calculation of operating income
a Units Sold                     5,000
b Units returned                        120
c Net units sold (a-b)                     4,880
d Price per unit $ 223.00
e Net sales (c*d) $ 1,088,240.00
f cost of goods sold (e*12%)   $      130,588.80
g Gross Profit (e-f) $ 957,651.20
h operating expenses $ 145,000.00
i operating income (g-h) $ 812,651.20
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