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Part 2: Music, Inc. Music, Inc. had the following beginning and ending values in its three inventory accounts: Jan 1, 2021 $500 $1,200 $600 Dec. 31, 2021 $800 Raw Materials Inventory Work-in-Progress Inventory Finished Goods Inventory $1,300 $750 Additional information for the year ending December 31, 2021: Manufacturing costs: $2,875 Sales revenue: $15,900 • Selling & Admin expenses: $3,600 Interest expense: $160 Income tax rate: 20%

Part 2: Music, Inc. Music, Inc. had the following beginning and ending values in its three inventory accounts: Jan 1, 2021 $500 $1,200 $600 Dec. 31, 2021 $800 Raw Materials Inventory Work-in-Progress Inventory Finished Goods Inventory $1,300 $750 Additional information for the year ending December 31, 2021: Manufacturing costs: $2,875 Sales revenue: $15,900 • Selling & Admin expenses: $3,600 Interest expense: $160 Income tax rate: 20%

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter6: Inventories
Section: Chapter Questions
Problem 6.2BE: Perpetual inventory using FIFO Beginning inventory, purchases, and sales for Item Zeta9 are as...
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Q11: What is Music, Inc.’s 2021 Operating Income?

 

 

Part 2: Music, Inc. Music, Inc. had the following beginning and ending values in its three inventory accounts: Jan 1, 2021 $500 $1,200 $600 Dec. 31, 2021 $800 Raw Materials Inventory Work-in-Progress Inventory Finished Goods Inventory $1,300 $750 Additional information for the year ending December 31, 2021: Manufacturing costs: $2,875 Sales revenue: $15,900 Selling & Admin expenses: $3,600 Interest expense: $160 Income tax rate: 20%
Transcribed Image Text:Part 2: Music, Inc. Music, Inc. had the following beginning and ending values in its three inventory accounts: Jan 1, 2021 $500 $1,200 $600 Dec. 31, 2021 $800 Raw Materials Inventory Work-in-Progress Inventory Finished Goods Inventory $1,300 $750 Additional information for the year ending December 31, 2021: Manufacturing costs: $2,875 Sales revenue: $15,900 Selling & Admin expenses: $3,600 Interest expense: $160 Income tax rate: 20%
Expert Solution
Step 1: Introduction to Operating Income

Operating income is basically income generated from the operations of business. Operations are core activities of business. Operating revenue is king of Gross Profit of Business, which is calculated on basis of direct activities of business.

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