Mega Towels reported the following data.

Price per unit = $10

Variable cost per unit = $7

Fixed cost = $1,500

Number of units sold = 700 units

Given these data, compute NET INCOME.

I keep getting 3,400. A friend insists it is 600.

Net income = (Price per unit x Number of units sold) - (Variable cost per unit x Number of units sold) - Fixed costNet income = ($10 x 700) - ($7 x 700) - $1,500Net income = $7,000 - $4,900 - $1,500Net income = $3,400

They say no it is:

$600 (Sales Price X Unit) - (Variable Cost X Unit) - Fixed Cost = Net Income (700 $10) - (700 $7) - $1,500 = $600

Which is right?