EA2.

Business

1 answer:

Nadya [2.5K]2 years ago

7 0

Answer:

$130,500

Explanation:

Given that,

service revenue = $720,000

Total cost (fixed and variable) per client = $2,500

Served = 115 clients during the year

operating expenses = $302,000

Gross profit:

= Service revenue - Total cost

= $720,000 - ($2,500 × 115)

= $720,000 - $287,500

= $432,500

Net income = Gross profit - operating expenses

= $432,500 - $302,000

= $130,500

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