Robusta Coffee Importers sold 7000 units in October at a sales price of $45 per unit. The variable cost is $20 per unit. The monthly fixed costs are $8000. Using the contribution income statement format, what is the operating income earned in October

Net operating income= 167,000

Explanation:

Giving the following information:

Robusta Coffee Importers sold 7000 units in October at a sales price of $45 per unit. The variable cost is $20 per unit. The monthly fixed costs are $8000.

Under the contribution margin income statement, the structure is as follow:

Sales=

Total variable cost= (-)

=Contribution margin=

Fixed costs= (-)

=Net operating income=

In this case:

Sales= 7,000*45= 315,000

Total variable cost= (7,000*20)= (140,000)

Contribution margin= 175,000

Fixed costs= (8,000)

Net operating income= 167,000

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough