Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product. If the company sells 9,700 units, its net operating income should be closest to:

Question

Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product.  If the company sells 9,700 units, its net operating income should be closest to:

Quizplus · Accepted Answer

Selling price per unit = $336,000 ÷ 9,600 units = $35 per unit
Variable expense per unit = $144,000 ÷ 9,600 units = $15 per unit
Unit CM = $35 per unit - $15 per unit = $20 per unit
Profit = Unit CM × Q - Fixed expenses
= $20 per unit × 9,700 units - $137,000 = $194,000 - $137,000 = $57,000

Wight Corporation Has Provided Its Contribution Format Income Statement for June