Donna Company Makes Three Types of Products What Is the Operating Income for All Three Products for Types

Multiple Choice

Donna Company makes three types of products.The company has two types of customers.The cost to serve all customers is $12,000 and is allocated to customer types based on the number of manager visits to customer locations.The following data are available:
$\begin{array}{llll}&\text { Product } 1&\text { Product } 2&\text { Product } 3\\\text { Sales } & \$ 5,000 & \$ 6,000 & \$ 30,000 \\\text { Cost of goods sold } & \underline{4,000} & \underline{4,800} & \underline{15,000} \\\text { Gross margin }&\$1,000&\$1,200&\$15,000\end{array}$
$\begin{array}{lll}&\text { Customer type }1&\text { Customer type }2\\\text { Product 1 Sales } & \$ 500 & \$ 4,500 \\\text { Product 2 Sales } & \$ 1,000 & \$ 5,000 \\\text { Product 3 Sales } & \$ 16,000 & \$ 14,000 \\\text { Manager visits } & 4 & 16\end{array}$
What is the operating income for all three products for Customer Type 1?

A) $2,400
B) $5,850
C) $5,900
D) $9,600