Assume the following Information: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount Per Unit $ 300,000 $ 40 120,000 16 180,000 $ 24 136,000 $ 44,000 If the variable expenses increase by $1 per unit, the advertising expenditures Increase by $15,000, and unit sales Increase by 5%, then the best of estimate of the new net operating Income is: Multiple Choice $30,125. $11,725. $44,375. $4,600.

Assume the following Information: Sales Variable expenses Contribution margin Fixed expenses Net operating income Amount Per Unit $ 300,000 $ 40 120,000 16 180,000 $ 24 136,000 $ 44,000 If the variable expenses increase by $1 per unit, the advertising expenditures Increase by $15,000, and unit sales Increase by 5%, then the best of estimate of the new net operating Income is: Multiple Choice $30,125. $11,725. $44,375. $4,600.

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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Question

Assume the following information: \table[[,Amount,Per Unit],[Sales,$300,000,$40

Assume the following Information:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Amount
Per Unit
$ 300,000
$ 40
120,000
16
180,000
$ 24
136,000
$ 44,000
If the variable expenses increase by $1 per unit, the advertising expenditures increase by $15,000, and unit
sales increase by 5%, then the best of estimate of the new net operating Income is:
Multiple Choice
$30,125.
$11,725.
$44,375.
$4,600.

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Step 1: Computation of the revised units sales:

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Step 2: Computation of the revised variable cost per unit:

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Step 3: Computation of the revised fixed expenses:

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Step 4: Computation of the new net operating income:

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