If the company sells 3,500 units, its net operating income should be closest to:

A) $5,513
B) $6,300
C) $300
D) -$4,700

Question

If the company sells 3,500 units, its net operating income should be closest to:A) $5,513B) $6,300C) $300D) -$4,700

Meeth Patel uCRGNtLzWW · Accepted Answer

Final Answer : C, Explanation :  Selling price per unit = $88,000 ÷ 4,000 units = $22 per unitVariable expense per unit = $40,000 ÷ 4,000 units = $10 per unitUnit CM = $22 per unit - $10 per unit = $12 per unitProfit = Unit CM × Q - Fixed expenses= $12 per unit × 3,500 units - $41,700 = $42,000 - $41,700 = $300Reference: CHO6-Ref5Kelsay Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.

If the company sells 3,500 units, its net operating income should be closest to:

A) $5,513
B) $6,300
C) $300
D) -$4,700

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