It Costs Homer's Manufacturing $0

Multiple Choice

It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece.Homer pays a sales commission of 5% of sales revenue to his sales staff.Homer also pays $12,000 a month rent for his factory and store,and also pays $75,000 a month to his staff in addition to the commissions.Homer sold 67,500 baseballs in June.If Homer prepares a contribution margin income statement for the month of June,what would be his operating income?

A) $292,875
B) $270,000
C) $64,125
D) $118,875