The following data (in thousands of dollars) have been taken from the accounting

Question

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation of the just completed year:
Sales $910
Raw materials inventory, beginning $80
Raw materials inventory, ending $20
Purchases of raw materials $100
Direct labor $130
Manufacturing overhead $200
Administrative expenses $160
Selling expenses $140
Work in process inventory, beginning $40
Work in process inventory, ending $10
Finished goods inventory, beginning $130
Finished goods inventory, ending $150

The net operating income for the year (in thousands of dollars) was
A.$410
B.$180
C.$40
D.$110


I added all the expenses together then subtracted them from the sales, and got B. $180. I just want to make sure that the way I figured this out was right and wanted to make sure the answer is right. Thanks in advance!

Explanation / Answer

Direct Materials: Raw materials, beginning 80 Plus Purchases of raw materials 100 Less raw materials, ending 20 Equals Direct materials used 160 Plus Direct Labor 130 Plus Manufacturing overhead 200 Equal Manufacturing costs incurred 490 Plus beginning WIP 40 Less ending WIP 10 Equals cost of goods manufactured 520 Answer: B, $520

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