EXERCISE 6-10 (20 MINUTES) TOTAL PER UNIT

3. Sales (20,000 units × 0.95 = 19,000 units) ... $313,500 $16.50

Less variable expenses ... 171,000 9.00

Contribution margin ... 142,500 $ 7.50

Less fixed expenses... 90,000

Net operating income ... $ 52,500