Today we have a question relating to the new 2019 syllabus for F1.
The question was:
An organisation generated total revenue of £100,000,000 with cost of goods of £75,000,000.
It also incurred selling expenses of £7,000,000 and administrative expenses of £6,000,000.
Along with a gain on the sale of an investment of £3,000,000 and a loss from a lawsuit of £1,500,000. Calculate the Operating Income for this organisation
This question relates to ‘B: Financial Statements’ and is a slightly different version of the question in one of our free mock exams.
The correct answer was…
Of the various expenses listed, the sale of the investment and the lawsuit would come after the Operating Income. Therefore:
Sales – Cost of Sales – Selling Exps – Admin Exps
£100m – £75m – £7m – £6m = £12m
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