Robusta Coffee Importers sold 6 comma 000 units in October at a sales price of $ 35 per unit. The variable cost is $ 15 per unit. The monthly fixed costs are $ 10 comma 000. What is the operating income earned in October?

Question

Business

Lyric Cannon

13 March, 16:38

Robusta Coffee Importers sold 6 comma 000 units in October at a sales price of $ 35 per unit. The variable cost is $ 15 per unit. The monthly fixed costs are $ 10 comma 000. What is the operating income earned in October?

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Answers (1)

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Hunter Le · Answer 1

Operating Income = $110,000

Explanation:

Giving the following information:

Robusta Coffee Importers sold 6,000 units in October at a sales price of $35 per unit. The variable cost is $ 15 per unit. The monthly fixed costs are $10,000.

The operating income is the difference between the contribution margin and the fixed costs:

Contribution margin = selling price - unitary variable cost

Operating income = Total contribution margin - fixed costs

OI = 6,000 * (35 - 15) - 10,000 = $110,000