Runnymeade Products makes a racing bicycle tire. Cost and volume data are below.
$$\begin{array} { | l | r | }
\hline \text { Pice per unit } & \$ 18.00 \
\hline \text { Variable cost per urit } & \$ 14.50 \
\hline \text { Fixed cost per manth } & \$ 28,000 \
\hline \text { Current sales valume (urits) } & 10,000 \
\hline
\end{array}$$
-
How much is current monthly operating income?

Question

Runnymeade Products makes a racing bicycle tire. Cost and volume data are below.
$$\begin{array} { | l | r | } 
\hline \text { Pice per unit } & \$ 18.00 \
\hline \text { Variable cost per urit } & \$ 14.50 \
\hline \text { Fixed cost per manth } & \$ 28,000 \
\hline \text { Current sales valume (urits) } & 10,000 \
\hline
\end{array}$$
-
How much is current monthly operating income?

Quizplus · Accepted Answer

Current monthly operating income is equal to the difference between total revenue and total cost. Total revenue is equal to the price per unit multiplied by the number of units sold, which is $18.00 x 10,000 = $180,000. Total cost is equal to the variable cost per unit multiplied by the number of units sold plus the fixed cost per month, which is $14.50 x 10,000 + $28,000 = $173,000. Therefore, current monthly operating income is $180,000 - $173,000 = $7,000.

Runnymeade Products Makes a Racing Bicycle Tire - How Much Is Current Monthly Operating Income? A) $7,000

Runnymeade Products Makes a Racing Bicycle Tire -
How Much Is Current Monthly Operating Income?
A) $7,000