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If a company has a contribution margin of $200,000 and fixed costs of $150,000,
If a company has a contribution margin of $200,000 and fixed costs of $150,000, what is the net profit?
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Practice Questions
1 question
Q1
If a company has a contribution margin of $200,000 and fixed costs of $150,000, what is the net profit?
$50,000
$200,000
$150,000
$350,000
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Net profit = Contribution Margin - Fixed Costs = 200000 - 150000 = $50,000.
Questions & Step-by-step Solutions
1 item
Q
Q: If a company has a contribution margin of $200,000 and fixed costs of $150,000, what is the net profit?
Solution:
Net profit = Contribution Margin - Fixed Costs = 200000 - 150000 = $50,000.
Steps: 6
Show Steps
Step 1: Identify the contribution margin, which is given as $200,000.
Step 2: Identify the fixed costs, which are given as $150,000.
Step 3: Use the formula for net profit: Net Profit = Contribution Margin - Fixed Costs.
Step 4: Substitute the values into the formula: Net Profit = 200,000 - 150,000.
Step 5: Calculate the result: 200,000 - 150,000 = 50,000.
Step 6: Conclude that the net profit is $50,000.
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