Decaprio Inc. produces and sells a single product. The company has provided its contribution format income statement for June. Sales (5,500 units) $ 192,500 Variable expenses 82,500 Contribution margin 110,000 Fixed expenses 86,500 Net operating income $ 23,500 If the company sells 5,700 units, its net operating income should be closest to: (Do not round intermediate calculations.)

Net operating income $ 24,354.54(*Assuming Fixed Expenses are not constant for a particular number of units)

Net operating income $ 27,500 Assuming FIXED expenses remain constant for a particular ( 5500 - 6000) number of units.

Explanation:

Decaprio Inc.

Contribution Format Income Statement for June

Sales (5,500 units) ($ 192,500 / 5500) * 5700=$ 199500

Variable expenses (82,500 / 5500) * 5700 = $ 85,500

Contribution margin   $ 114,000

Fixed expenses 86,500  Assuming FIXED expenses remain constant

Net operating income $ 27,500

Decaprio Inc.

Contribution Format Income Statement for June

Sales (5,500 units) ($ 192,500 / 5500) * 5700=$ 199500

Variable expenses (82,500 / 5500) * 5700 = $ 85,500

Contribution margin   $ 114,000

Fixed expenses (86,500 / 5500) * 5700= 89645.45

(*Assuming Fixed Expenses are not constant for a particular number of units)

Net operating income $ 24,354.54

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