Given a revenue of $15,000, variable costs totaling $5,000, and fixed costs amounting to $2,000, what is the operating income?

Multiple choice question for Cost Volume Profit Analysis. Select an option, then review the explanation below.

Explanation

Operating income is calculated by subtracting both variable and fixed costs from the total revenue. Here, $15,000 (revenue) minus $5,000 (variable costs) and $2,000 (fixed costs) results in an operating income of $8,000.

Practice related questions from the same subject.

1.What is obtained when the fixed costs are divided by the contribution margin per unit?
2.Given a contribution margin ratio of 30% and a selling price of $5,000, what is the contribution margin amount for each unit?
3.Given a contribution margin of $13,000 and total variable costs amounting to $7,000, what is the total revenue?
4.Given a selling price of $5000 and a contribution margin per unit of $1000, what is the contribution margin percentage?
5.Given that the total revenue amounts to $9,000 and the total variable costs are $2,000, what is the contribution margin?

Given a revenue of $15,000, variable costs totaling $5,000, and fixed costs amounting to $2,000, what is the operating income?

Explanation

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