1.

Assume that a manufacturing company incurred the following:

Direct labor	$	90,000
Advertising	$	26,000
Factory supervision	$	35,000
Sales commissions	$	15,000
Depreciation, office equipment	$	4,000
Indirect materials	$	5,000
Depreciation, factory building	$	20,000
Administrative office salaries	$	1,000
Utilities, factory	$	2,500
Direct materials	$	105,000
Insurance, factory	$	6,000
Property taxes, factory	$	7,000

What is the total fixed selling and administrative cost?

2.

Assume the following information for a merchandising company:

Number of units sold		20,000
Selling price per unit	$	30
Variable selling expense per unit	$	3.5
Variable administrative expense per unit	$	2.5
Fixed selling expenses	$	30,000
Fixed administrative expenses	$	50,000
Beginning merchandise inventory	$	24,000
Ending merchandise inventory	$	19,000
Merchandise purchases	$	340,000

What is the net operating income?