Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 3 - Cost-Volume-Profit Analysis - Assignment Material - Problems - Page 103: 3-44(3)

Answer

Operating Income = 60,000 + 160,000 + 100,000 - 255,000 Operating Income = 65,000

Work Step by Step

If 20,000 units of A, 80,000 units of B, and 100,000 units of C are sold, the operating income can be calculated as follows: Operating Income = (Contribution Margin A $\times$ Units A) + (Contribution Margin B $\times$ Units B) + (Contribution Margin C $\times$ Units C) - Fixed Costs Operating Income = ($3 \times 20,000) + (2 \times 80,000) + (1 \times 100,000) - 255,000$
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