Royal Company Budgeted Income Statement For the Three Months Ended June 30 Sales (100,000 units @ $10) Cost of goods sold (100,000 @ $4.99) Gross margin Selling and administrative expenses Operating income Interest expense Net income $ 1,000,000 499,000 501,000 260,000 241,000 1,920 239,080 $ My question is: Why the "Interest Expense $1,920" is shown separately as an individual item and subtracted from Operating Income and NOT added to Selling and administrative expenses ($260,000+ $1,920 = $261,920) as a total for the subtraction?

My question is: Why the "Interest Expense $1,920 " is shown separately as an individual item and subtracted from Operating Income and NOT added to Selling and administrative expenses ($260,000+$1,920=$261,920) as a total for the subtraction