Question

Daisy's Dolls sold 30,000 dolls this year. Each doll sold for $40 and had a variable cost of $19. Fixed expenses were $250,000. Net operating income for the year is

Answer 1

The Net operating income for the year is $380,000

What is Net operating?

Net operating income (NOI) is a common metric for determining a property's profitability. The calculation involves deducting all operating expenses from all revenue generated by the property. The more profitable a property is, the higher the revenues and the lower the expenses.

A property, for example, may earn money from tenant rents and a coin laundry machine. Operating expenses include not only maintenance fees, but also insurance and professional assistance. The strength of NOI is that it incorporates all necessary income and expenditures per property into a single calculation.

Using this formula

Net operating income=[Sales×(Fixed Cost-Variable cost)] -Fixed expenses

Let plug in the formula

Net operating income=[30,000×($40-$19)]-$250,000

Net operating income=(30,000×$21) -$250,000

Net operating income=$630,000-$250,000

Net operating income=$380,000

Inconclusion The Net operating income for the year is $380,000.

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