Magic Realm, Inc. has developed a new fantasy board game. The company sold 14,00
ID: 2419030 • Letter: M
Question
Magic Realm, Inc. has developed a new fantasy board game. The company sold 14,000 games last year at a selling price of $21 per game. Fixed costs associated with the game total $180,000 per year, and variable costs are $6 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor.
Magic Realm, Inc. has developed a new fantasy board game. The company sold 14,000 games last year at a selling price of $21 per game. Fixed costs associated with the game total $180,000 per year, and variable costs are $6 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor.
total per unit sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating incomeExplanation / Answer
Computation of net operating income of the new fantasy board game is as follow:
Particulars Total Per unit Sales 14,000 x 21 $ 294,000 $ 21.00 Less: Variable expenses 14,000 x 6 (84,000) (6.00) Contribution margin 210,000 15.00 Less: Fixed expenses (180,000) 180,000/14,000 12.86 Net operating income $ 30,000 $ 2.14Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.