Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows:
$$\begin{array} { | l | r | }
\hline \text { Pice per unit } & \$ 25.00 \
\hline \text { Variable cost per unit } & \$ 20.00 \
\hline \text { Fixed cost per month } & \$ 8,000 \
\hline \text { Current sales volume (units) } & 3,000 \
\hline
\end{array}$$
-
How much is Bell's current monthly operating income?

Question

Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows:
$$\begin{array} { | l | r | } 
\hline \text { Pice per unit } & \$ 25.00 \
\hline \text { Variable cost per unit } & \$ 20.00 \
\hline \text { Fixed cost per month } & \$ 8,000 \
\hline \text { Current sales volume (units) } & 3,000 \
\hline
\end{array}$$
-
How much is Bell's current monthly operating income?

Quizplus · Accepted Answer

Operating income is calculated as (Sales Revenue - Variable Costs - Fixed Costs). Sales Revenue = 3,000 units * $25 = $75,000. Variable Costs = 3,000 units * $20 = $60,000. Operating Income = $75,000 - $60,000 - $8,000 = $7,000.

Bell Products Manufactures Packs of Pesticides Which Are Sold to Farmers