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5 September, 00:38

Robusta Coffee Importers sold 6 comma 000 units in October at a sales price of $ 35 per unit. The variable cost is $ 15 per unit. The monthly fixed costs are $ 10 comma 000. What is the operating income earned in October?

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  1. 5 September, 00:57
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    Operating Income = $110,000

    Explanation:

    Giving the following information:

    Robusta Coffee Importers sold 6,000 units in October at a sales price of $35 per unit. The variable cost is $ 15 per unit. The monthly fixed costs are $10,000.

    The operating income is the difference between the contribution margin and the fixed costs:

    Contribution margin = selling price - unitary variable cost

    Operating income = Total contribution margin - fixed costs

    OI = 6,000 * (35 - 15) - 10,000 = $110,000
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