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28 February, 04:50

The following income statement was produced when volume of sales was at 400 units. Sales Revenue $ 1,600 Variable Cost 700 Contribution Margin $ 900 Fixed Cost 410 Net Income $ 490 If volume reaches 500 units, net income will be:

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  1. F
    28 February, 07:19
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    If volume reaches 500 units, net income will be: $715

    Explanation:

    When volume of sales was at 400 units:

    Selling price per unit = Sales Revenue/400 = $1,600/400 = $4

    Variable Cost per unit = Variable Cost/400 = $700/400 = $1.75

    If volume reaches 500 units:

    Total Sales Revenue = $4 x 500 = $2,000

    Variable Cost = $1.75 x 500 = $875

    Fixed Cost will not change = $410

    Net income = Total Sales Revenue - Variable Cost - Fixed Cost = $2,000 - $875 - $410 = $715
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Home » Business » The following income statement was produced when volume of sales was at 400 units. Sales Revenue $ 1,600 Variable Cost 700 Contribution Margin $ 900 Fixed Cost 410 Net Income $ 490 If volume reaches 500 units, net income will be:
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