Question

Fill in the blank question. A product has a selling price of $10 per unit, variable expenses of $6 per unit and total fixed costs of $35,000. If 10,000 units are sold, net operating income will be $. (Enter your answer as a whole number.)

Answer 1

The net operating income is $5,000.

What is the net operating income?

The net operating income is total revenue less direct and indirect expenses.

The net operating income = total revenue - variable expenses - fixed costs.

Total revenue is price per unit multiplied by the total quantity sold. The variable expense cost per unit multiplied by the total quantity sold.

(10,000 x $10) - (10,000 x $6) - $35,000

100,000 - 60,0000 - 35,000 = $5,000

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