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Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November. Sales (7,300 units) $ 350,400 Variable expenses 204,400 Contribution margin 146,000 Fixed expenses 103,500 Net operating income $ 42,500 If the company sells 7,200 units, its net operating income should be closest to:

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Answer:

Net operating income= 40,500

Explanation:

Giving the following information:

Contribution margin 146,000

Fixed expenses 103,500

Sales= 7,200

First, we need to calculate the unitary contribution margin:

Unitary contribution margin= 146,000/7,300= $20

Now, for 7,200:

Total contribution margin= 7,200*20= 144,000

Fixed costs= (103,500)

Net operating income= 40,500