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Carla Vista sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: sales revenue - $810,000, per unit $54, variable expense - $364, 500, per unit $24.30, contribution margin - $ 445,500, per unit $29.70, fixed espense - $261, 250, operating income - $184, 250 Carla Vista's managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Carla Vista sells. What will be Carla Vista's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)

Carla Vista sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: sales revenue - $810,000, per unit $54, variable expense - $364, 500, per unit $24.30, contribution margin - $ 445,500, per unit $29.70, fixed espense - $261, 250, operating income - $184, 250 Carla Vista's managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Carla Vista sells. What will be Carla Vista's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Carla Vista sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: sales revenue - $810,000, per unit $54, variable expense - $364, 500, per unit $24.30, contribution margin - $ 445,500, per unit $29.70, fixed espense - $261, 250, operating income - $184, 250 Carla Vista's managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Carla Vista sells. What will be Carla Vista's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)
Transcribed Image Text:Carla Vista sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: sales revenue - $810,000, per unit $54, variable expense - $364, 500, per unit $24.30, contribution margin - $ 445,500, per unit $29.70, fixed espense - $261, 250, operating income - $184, 250 Carla Vista's managers have determined that variable costs per unit will increase by 20% beginning next month. To offset this increase in costs, they are considering a 10% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Carla Vista sells. What will be Carla Vista's expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)
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