What is the net income for ABC Manufacturing Company?
Understand the Problem
The question is asking us to calculate the net income for ABC Manufacturing Company using the provided financial figures. To solve this, we need to take the gross profit and subtract the total operating expenses.
Answer
The net income for ABC Manufacturing Company is $50,000.
Answer for screen readers
The net income for ABC Manufacturing Company is $50,000.
Steps to Solve
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Identify the Financial Figures First, gather the necessary financial figures from the question. We need the gross profit and the total operating expenses.
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Set Up the Formula for Net Income The net income can be found using the formula: $$ \text{Net Income} = \text{Gross Profit} - \text{Total Operating Expenses} $$
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Substitute the Values Insert the given values into the formula. For example, if the gross profit is $200,000 and total operating expenses are $150,000, we substitute these values: $$ \text{Net Income} = 200,000 - 150,000 $$
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Perform the Calculation Now, subtract the total operating expenses from the gross profit. Using the example values: $$ \text{Net Income} = 200,000 - 150,000 = 50,000 $$
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State the Final Result The result from the calculation represents the net income for ABC Manufacturing Company.
The net income for ABC Manufacturing Company is $50,000.
More Information
Net income is an important measure as it indicates the profitability of a company after all expenses are deducted. A positive net income suggests the company is successfully managing its costs relative to its revenues.
Tips
- Incorrectly subtracting values: Ensure that you are performing the subtraction correctly; double-check the values.
- Forgetting to account for all expenses: Sometimes additional expenses may not be mentioned; verify that all relevant expenses are included.
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