Data for Capitol Suppliers are shown below: Total Sales (1,500 units) $750,000 Less Variable Costs $525,000 Contribution Margin $225,000 Less Fixed Costs $200,000 Net Operating Income $ 25,000 The company sells Whiteboard sets to Government and Private schools. Management is considering removing the monthly salaries of its Sales staff, thereby reducing Fixed expenses by 10% per month. The company will pay a sales commission instead to its Sales staff which will increase variable cost per unit by $20. Which one of the following would be the net operating income if the changes were made? Select one: • A. $5,000 • B. $15,000 • C. $45,000 D. $20,000
Data for Capitol Suppliers are shown below: Total Sales (1,500 units) $750,000 Less Variable Costs $525,000 Contribution Margin $225,000 Less Fixed Costs $200,000 Net Operating Income $ 25,000 The company sells Whiteboard sets to Government and Private schools. Management is considering removing the monthly salaries of its Sales staff, thereby reducing Fixed expenses by 10% per month. The company will pay a sales commission instead to its Sales staff which will increase variable cost per unit by $20. Which one of the following would be the net operating income if the changes were made? Select one: • A. $5,000 • B. $15,000 • C. $45,000 D. $20,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Data for Capitol Suppliers are shown below: Total Sales (1,500 units) $750,000 Less Variable Costs $525,000 Contribution Margin $225,000 Less Fixed Costs $200,000 Net Operating Income $ 25,000 The company sells Whiteboard sets to Government and Private schools. Management is considering removing the monthly salaries of its Sales staff, thereby reducing Fixed expenses by 10% per month. The company will pay a sales commission instead to its Sales staff which will increase variable cost per unit by $20. Which one of the following would be the net operating income if the changes were made?
Select one:
• A. $5,000
• B. $15,000
• C. $45,000
D. $20,000
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