Question

egas Company has the following unit costs: Variable manufacturing overhead $25 Direct materials 20 Direct labor 19 Fixed manufacturing overhead 12 Variable marketing and administrative 7 Vegas produced and sold 10,000 units. If the product sells for $100, what is the net income using a contribution margin income statement

Answer 1

Answer:

$290,000

Explanation:

Calculation for what is the net income using a contribution margin income statement

Using this formula

Net income=(Product sells-Variable manufacturing overhead --Direct materials -Direct labor -Variable marketing and administrative)*Units sold

Let plug in the formula

Net income=($100 – $25 – $20 – $19 – $7) ×$10,000

Net income=$29×$10,000

Net income= $290,000

Therefore the net income using a contribution margin income statement will be $290,000