I need the actual amount, the calculation is correct.
Scott Higgins, the new plant manager of Old State Manufacturing Plant Number 7, has just reviewed a draft of his year-end financial statements. Higgins receives a year-end bonus of 11.5% of the plant's operating income before tax. The year-end income statement provided by the plant's controller was disappointing to say the least. After reviewing the numbers, Higgins demanded that his controller go back and "work the numbers" again. Higgins insisted that if he didn't see a better operating income number the next time around he would be forced to look for a new controller. Requirement 1. Show numerically how operating income would improve by $495,000 just by classifying the preceding costs as product costs instead of period expenses? Begin by determining the formula to compute how the controller was able to improve operating income, then enter the appropriate amounts and compute the increase in operating income. Scott Higgins, the new plant manager of Old State Manufacturing Plant Number 7, has just reviewed a draft of his year-end financial statements. Higgins receives a year-end bonus of 11.5% of the plant's operating income before tax. The year-end income statement provided by the plant's controller was disappointing to say the least. After reviewing the numbers, Higgins demanded that his controller go back and "work the numbers" again. Higgins insisted that if he didn't see a better operating income number the next time around he would be forced to look for a new controller. Requirement 1. Show numerically how operating income would improve by $495,000 just by classifying the preceding costs as product costs instead of period expenses? Begin by determining the formula to compute how the controller was able to improve operating income, then enter the appropriate amounts and compute the increase in operating income