Wendy Industries produces only one product. Monthly fixed expenses are $12000 monthly unit sales are 4000 and the unit contribution margin is $10. How much is monthly net income?
A) $40000
B) $52000
C) $0
D) $28000

Question

Quizplus · Accepted Answer

The monthly net income is calculated by subtracting the total fixed expenses from the total contribution margin. The total contribution margin is the unit contribution margin ($10) multiplied by the monthly unit sales (4000), which equals $40,000. Subtracting the monthly fixed expenses ($12,000) from this amount gives a monthly net income of $28,000.

Wendy Industries Produces Only One Product