Question

A product has a selling price of $10 per unit, variable expenses of $6 per unit and total fixed costs of $35,000. If 10,000 units are sold, net operating income will be $_______.

Answer 1

The net operating income on a product sold for $10 per unit is $5,000.

What is the net operating income?

Net operating income(NOI) is the profit margin of an income-producing asset before any financing or tax charges are factored in.

The net operating income is computed by Subtracting all operational expenditures from all money collected on a property.

Mathematically;

NOI = ($10 - $6) × 10,000 - $35,000

NOI = $5,000.

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