Savannah Company sells glass vases at a wholesale price of $5 per unit
The variable cost of manufacture is $2.50 per unit. The fixed costs are $6,200 per month. It sold 5,700 units during this month. Calculate Savannah's operating income (loss) for this month.
A) $22,300
B) $8,050
C) ($8,050 )
D) ($6,200 )
B .B)
Net sales revenue ($5 x 5,700 ) $28,500
Variable costs ($2.50 x 5,700 ) (14,250 )
Contribution margin 14,250
Fixed costs (6,200 )
Operating income (loss) $8,050
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