Question

A company's products had sales of $750,000 and total costs of $360,000. If the net operating income for the company was $215,000, total overhead costs not assigned to products was ___ $.

Answer 1

Total overhead costs not assigned to products was $175,000

Step-by-step explanation:

Overhead costs are indirect expenses required to run a business. Overhead costs include accounting and auditing fees, advertising, insurance, interest, legal fees, Administrative salaries, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.

Net operating income for the company = Net sales - Cost off goods sold - Overhead expense.

Overhead expense = Net sales - Cost off goods sold - Net operating income for the company = $750,000 - $360,000 - $215,000 = $175,000