Hinge Manufacturing's cost of goods sold is $420,000 variable and $240,000 fixed.The company's selling and administrative expenses are $300,000 variable and $360,000 fixed.
-If the company's sales is $1,480,000, what is its net income?

Question

Quizplus · Accepted Answer

To calculate net income, subtract total expenses from sales. Total expenses include cost of goods sold (variable $420,000 + fixed $240,000 = $660,000) and selling and administrative expenses (variable $300,000 + fixed $360,000 = $660,000). Total expenses = $660,000 + $660,000 = $1,320,000. Net income = Sales $1,480,000 - Total expenses $1,320,000 = $160,000.

Hinge Manufacturing's Cost of Goods Sold Is $420,000 Variable and $240,000