Wendy Industries produces only one product.Monthly fixed expenses are $12,000, monthly unit sales are 2,500, and the unit contribution margin is $10.How much is monthly net income?
A)$25,000
B)$37,000
C)$0
D)$13,000

Question

Quizplus · Accepted Answer

The monthly net income is calculated by subtracting total fixed expenses from total contribution margin. Total contribution margin is unit contribution margin multiplied by unit sales, which is $10 * 2,500 = $25,000. Subtracting fixed expenses of $12,000 from $25,000 gives a net income of $13,000.

Wendy Industries Produces Only One Product