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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 (7,100 units) $ 326,600 Variable expenses 184,600 Contribution margin 142,000 Fixed expenses 103,500 Net operating income $ 38,500 If the company sells 7,000 units, its net operating income should be closest to: (Do not round intermediate calculations.)

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Answer:

Instructions are below.

Explanation:

Giving the following information:

Sales (7,100 units) $ 326,600

Variable expenses 184,600

Contribution margin 142,000

Fixed expenses 103,500

Firsts, we need to calculate the selling price and unitary varaible cost:

Selling price= 326,600/7,100= $46

Unitary variable cost= 184,600/7,100= $26

For 7,000 units:

Sales= (7,000*46)= 322,000

Variable cost= (7,000*26)= (182,000)

Total contribution margin= 140,000

Fixed costs= (103,500 )

Net operating income= 36,500

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