Question

For Sheridan Company, sales is $1200000, fixed expenses are $340000, and the contribution margin ratio is 36%. What is net income?

Answer 1

Answer:

the net income is $92,000

Explanation:

The computation of the net income is shown below:

Net income = Contribution margin - fixed expenses

where,

Contribution margin is

= Sales × contribution margin ratio

= $1,200,000 × 36%

= $432,000

And, the fixed expenses is $340,000

So, the net income is

= $432,000 - $340,000

= $92,000

hence, the net income is $92,000