Ajani Company has variable costs equal to 40% of sales. The company is considering a proposal that will increase sales by $10,000 and total fixed costs by $6,000. By what amount will net income increase?

Ajani Company has variable costs equal to 40% of sales. The company is considering a proposal that will increase sales by $10,000 and total fixed costs by $6,000. By what amount will net income increase?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 3DQ: Suppose a company finds that shipping cost is 3,560 each month plus 6.70 per package shipped. What...

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Question

100%

What amount will net income increase?

Ajani Company has variable
costs equal to 40% of sales. The
company is considering a
proposal that will increase
sales by $10,000 and total
fixed costs by $6,000. By what
amount will net income
increase?

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