At a price of $45, the estimated monthly sales of a product are 18,000 units. Variable...
At a price of $45, the estimated monthly sales of a product are 18,000 units. Variable costs include manufacturing costs of $22 and distribution costs of $7. Fixed costs are $60,000 per month.
Required:
What is the before-tax Net Operating Income?
Homework Answers
| Particulars | Amount |
| Sales (18,000 units x $45) | $810,000 |
| Less: Variable costs: | |
| Manufacturing costs (18,000 units x $22) | 396000 |
| Distribution costs (18,000 units x $7) | 126000 |
| Contribution margin | $288000 |
| Less: Fixed costs | $60,000 |
| Net Operating Income before-tax | $228,000 |
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