A merchandiser plans to sell 13,500 units next month at a selling price of $110 per unit.

It also gathered the following cost estimates for next month:

Cost Cost Formula Cost of goods sold $60 per unit sold

Advertising expense $150,000 per month

Depreciation expense $70,000 per month

Shipping expense $100,000 per month + $10 per unit sold

Administrative salaries $50,000 per month

Sales commissions 5% of sales

Insurance expense $15,000 per month

What is the estimated net operating income for next month?

What is the total estimated gross margin for next month if they sold 12,300 units?