Question

Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November. Sales (6,300 units) $ 403,200 Variable expenses 277,200 Contribution margin 126,000 Fixed expenses 103,500 Net operating income $ 22,500 If the company sells 6,200 units, its net operating income should be closest to:

Answer 1

Answer:

Net operating income= $20,500

Explanation:

Giving the following information:

Sales (6,300 units) $ 403,200

Variable expenses 277,200

Fixed expenses 103,500

First, we need to calculate the unitary selling price and variable cost per unit.

Selling price= 403,200/6,300= 64

Unitary variable cost= 277,200/6,300= 44

For 6,200 units:

Sales= 6,200*64= 396,800

Varaible cost= 6,200*44= (272,800)

Contribution margin= 124,000

Fixed costs= (103,500)

Net operating income= $20,500