Gaudy Inc.produces and sells a single product.The company has provided its contribution format income statement for May. If the company sells 4,300 units,its net operating income should be closest to:

Question

Gaudy Inc.produces and sells a single product.The company has provided its contribution format income statement for May.  If the company sells 4,300 units,its net operating income should be closest to:

Quizplus · Accepted Answer

Variable expenses per unit = Variable expenses F1F1F1S1F1F1F10 Quantity sold
= $265,500 F1F1F1S1F1F1F10 4,500 units = $59 per unit
Selling price per unit = Sales F1F1F1S1F1F1F10 Quantity sold
= $427,500 F1F1F1S1F1F1F10 4,500 units = $95 per unit
Unit CM = Selling price per unit - Variable expenses per unit
= $95 per unit - $59 per unit = $36 per unit
Profit = Unit CM F1F1F1S1F1F1F10 Q - Fixed expenses
= ($36 per unit F1F1F1S1F1F1F10 4,300 units)- $135,300 = $154,800 - $135,300 = $19,500

Gaudy IncProduces and Sells a Single Product