CBA Company\'s e-tail website was shut down by a cyber-attack for one day. The s

ID: 2475798 • Letter: C

Question

CBA Company's e-tail website was shut down by a cyber-attack for one day. The sales loss is $875,000. An outside tech security company will restore the site and charge $90 per hour. Restoration is estimated to take 100 hours. The summary quarterly report for CBA follows:

Sales

$12,000,000

Cost of Sales

8,000,000

Gross Margin

$4,000,000

Operating Exp.

1,000,000

Net Income

$3,000,000

Determine the loss from the cyber-attack.

a. $227,750.

b. $291,667.

c. $300,667.

d. $884,000.

Sales

$12,000,000

Cost of Sales

8,000,000

Gross Margin

$4,000,000

Operating Exp.

1,000,000

Net Income

$3,000,000

Explanation / Answer

Calculation of loss from the cyber-attack:

Loss of Sales

$ 875,000

Less: Cost of Sales (8000000*875000/12000000)

$ (583,333)

Less: Operating Expenses ((1000000*875000/12000000)

$ (72,917)

Add: restoration Charges (100 hours * $90)

$ 9,000

Loss from the cyber-attack

$ 227,750