Bumpass Corporation's contribution margin ratio is 79% and its fixed monthly expenses are $ 48,000. Assume that the company's sales for July are expected to be $ 107,000.

Required:

Estimate the company's net operating income for July, assuming that the fixed monthly expenses do not change. (Omit the "$" sign in your response.)

Net operating income

DeAnne Company produces a single product. The company's variable costing income statement for August appears below:

De Anne Company Income Statement For the month ending August 31
Sales ($24 per unit)	$988,800
Variable expenses:
Variable cost of goods sold	535,600
Variable selling expense	164,800
Total variable expenses	700,400
Contribution margin	288,400
Fixed expenses:
Fixed manufacturing	140,120
Fixed selling and administrative	105,090
Total fixed expenses	245,210
Net operating income	$ 43,190

The company produced 35,030 units in August and the beginning inventory consisted of 8,690 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.

Under absorption costing, for the month ended August 31, the company would report a Net operating profit (loss) of:

$18,510 loss

$105,090 profit

$18,510 profit

$43,190 profit

DeAnne Company produces a single product. The company's variable costing income statement for August appears below:

DeAnne Company Income Staement For the month ended August 31
Sales ($21 per unit)	$ 905,100
Variable expenses:
Variable cost of goods sold	560,300
Variable selling expense	129,300
Total variable expenses	689,600
Contribution margin	215,500
Fixed expenses:
Fixed manufacturing	141,640
Fixed selling and administrative	35,410
Total fixed expenses	177,050
Net operating income	$ 38,450

The company produced 35,410 units in August and the beginning inventory consisted of 8,520 units. Variable production costs per unit and total fixed costs have remained constant over the past several months.

Under absorption costing, the ending inventory for the month ended August 31 would be reported at:

	$10,790
	$16,600
	$14,110
	$21,600

Answer rating: 100% (QA)

Calculate the net operating income for July For the given information contribution margin can be cal... View the full answer