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EA2.
LO 2.1Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019, they generated $720,000 in service revenue. Their total cost (fixed and variable) per client was $2,500 and they served 115 clients during the year. If operating expenses for the year were $302,000 what was their net income?

Respuesta :

Answer:

$130,500

Explanation:

Given that,

service revenue = $720,000

Total cost (fixed and variable) per client = $2,500

Served = 115 clients during the year

operating expenses = $302,000

Gross profit:

= Service revenue - Total cost

= $720,000 - ($2,500 × 115)

= $720,000 - $287,500

= $432,500

Net income = Gross profit - operating expenses

                    = $432,500 - $302,000

                    = $130,500

Tundexi

The company's net income is $130,500.

Given Information

Service revenue = $720,000

Total cost (fixed and variable) per client = $2,500

Served = 115 clients during the year

operating expenses = $302,000

Gross profit = Service revenue - Total cost

Gross profit = $720,000 - ($2,500 * 115 client)

Gross profit = $720,000 - $287,500

Gross profit = $432,500

Net income = Gross profit - operating expenses

Net income = $432,500 - $302,000

Net income= $130,500

Thus, the company's net income is $130,500.

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