Question

Given sales of $100,000 a contribution margin of $40,000, and fixed expenses of $50,000, the result is a ______.

Answer 1

Given sales of $100,000 a contribution margin of $40,000, and fixed expenses of $50,000, the result is a $10,000 net operating loss.

What is net operating loss?

The net operating loss is when total revenue is less than direct and indirect expenses. Direct expenses in variable cost while indirect expenses is fixed cost.

The net operating loss = contribution margin - fixed costs.

$40,000 - $50,000 = $-10,000

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