Question

What is the estimation for the annual profit/loss based on the provided information below:

Annual production rate 38,000 unit per year
Selling Price $80 unit per unit
Fixed production cost $200,000 per year
Variable production cost $1200,000 per year
Variable selling expenses $53,000 per year

Answer 1

Answer:

Net operating income= $1,587,000

Explanation:

Giving the following information:

Annual production rate 38,000 unit per year

Selling Price $80 unit per unit

We will make a contribution margin income statement to determine the gain/loss:

Sales= 38,000*80= 3,040,000

Total variable cost= (1,200,000 + 53,000)= (1,253,000)

Contribution margin= 1,787,000

Total fixed costs= (200,000)

Net operating income= 1,587,000