Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the net income on sales of $2,000,000 per month.

A) $540,000
B) $260,000
C) $798,000
D) $1,140,000
E) $280,000

Question

Paola Portabales · Accepted Answer

Final Answer : A, Explanation :  Net income is calculated by subtracting total costs (variable and fixed) from sales revenue. Variable costs are 43% of $2,000,000, which equals $860,000. Fixed costs are $600,000. Total costs are $860,000 + $600,000 = $1,460,000. Sales revenue is $2,000,000, so net income is $2,000,000 - $1,460,000 = $540,000.

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the net income on sales of $2,000,000 per month.

A) $540,000
B) $260,000
C) $798,000
D) $1,140,000
E) $280,000

Definitions

Learning Objectives

Learning Objectives

Related questions

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the net income on sales of $2,000,000 per month.A) $540,000B) $260,000C) $798,000D) $1,140,000E) $280,000

Definitions

Learning Objectives

Learning Objectives

Related questions

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the net income on sales of $2,000,000 per month.

A) $540,000
B) $260,000
C) $798,000
D) $1,140,000
E) $280,000