Olive Corporation has two divisions, Pressing and Extracting. The company's primary product is Lavender Oil. Each division's costs are provided below: Extracting: Variable costs per barrel of oil $ 9 Fixed costs per barrel of oil $ 6 Pressing: Variable costs per barrel of oil $28 Fixed costs per barrel of oil $32 The Pressing Division sells the 200 barrels at a price of $150 each to customers. What is the operating income of both divisions together

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omotayoadekoya1 omotayoadekoya1 · Answer 1 · 2020-05-09T04:25:09+02:00

Answer:

$15,000

Explanation:

Operating income is the difference between the net sales or revenue generated by a business and the operating expenses of the business.

The operating expenses of the business may be classified into 2 groups namely the fixed and variable costs.

The total operating cost of the business

= ( $9 + $6 + $28 + $32) per barrel

= $75

operating income of both divisions

= 200 ( $150 - $75)

= 200 * $75

= $15,000