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$600Dec. 31, 2021$800Raw Materials InventoryWork-in-Progress InventoryFinished Goods Inventory$1,300$750Additional information for the year ending December 31, 2021:Manufacturing costs: $2,875Sales revenue: $15,900Selling & Admin expenses: $3,600Interest expense: $160Income tax rate: 20%

Answered: Part 2: Music, Inc. Music, Inc. had the…

FINANCIAL ACCOUNTING

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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%

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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