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If a company produced 1000 units with 5$ cost per unit and does not sell any of them and admin expenses is 700$ . selling price is 10$ .

<p><em><strong>The net operating income is:</strong></em></p> <p><em><strong>1- profit9300$ .</strong></em></p> <p><em><strong>2- Zero.</strong></em></p> <p><em><strong>3-700$ loss .</strong></em></p> <p><em><strong>4- Something else .</strong></em></p> <p><em><strong> </strong></em></p> <p> </p>

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Question added by Deleted user
Date Posted: 2014/11/05
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by Deleted user

Net Operating Income = Revenue (Sale of Goods) - COGS - Admin & Other charges

 

So in this case, since none of the products are sold;

 

NOI = (0*10) - (1000*5) -700 =>0 -5000 -700 == -5700 $

 

Answer is Option4::Something Else (5700 $ Loss)

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