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A company has provided the following data: Sales Sales price Variable cost Fixed cost 2,825 units $ 74 per unit $54 per unit $25,000 If the sales volume decreases by 20%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will: a. decrease by $18,500. b. decrease by $29,606. c. increase by $23,084. d. decrease by $1,894.

A company has provided the following data: Sales Sales price Variable cost Fixed cost 2,825 units $ 74 per unit $54 per unit $25,000 If the sales volume decreases by 20%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will: a. decrease by $18,500. b. decrease by $29,606. c. increase by $23,084. d. decrease by $1,894.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company has provided the following data: Sales Sales price Variable cost Fixed cost 2,825 units $ 74 per unit $54 per unit $25,000 If the sales volume decreases by 20%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will: a. decrease by $18,500. b. decrease by $29,606. c. increase by $23,084. d. decrease by $1,894.
Transcribed Image Text:A company has provided the following data: Sales Sales price Variable cost Fixed cost 2,825 units $ 74 per unit $54 per unit $25,000 If the sales volume decreases by 20%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will: a. decrease by $18,500. b. decrease by $29,606. c. increase by $23,084. d. decrease by $1,894.
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