Homework Help is Here – Start Your Trial Now!
Business
Accounting
Gwyneth Inc currently has a contribution margin of $20 on its only product and sells 47,000 units. Gwyneth inc. is considering cutting its sales price by $2 to generate an increase in sales of 13,000 units. How will this change affect its operating income? OA. It will decrease operating income. $140,000 OB. It will increase operating income by $140,000. OC. It will decrease operating income by $94.000 OD. It will increase operating income by $94,000.

Gwyneth Inc currently has a contribution margin of $20 on its only product and sells 47,000 units. Gwyneth inc. is considering cutting its sales price by $2 to generate an increase in sales of 13,000 units. How will this change affect its operating income? OA. It will decrease operating income. $140,000 OB. It will increase operating income by $140,000. OC. It will decrease operating income by $94.000 OD. It will increase operating income by $94,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please help me with show all calculation thanku
Gwyneth Inc currently has a contribution margin of $20 on its only product and sells 47,000 units. Gwyneth inc. is considering cutting its sales price by $2 to generate an increase in sales of 13,000 units. How will this change affect its operating income? OA. It will decrease operating income. $140,000 OB. It will increase operating income by $140,000. OC. It will decrease operating income by 594,000 OD. It will increase operating Income by $94,000.
Transcribed Image Text:Gwyneth Inc currently has a contribution margin of $20 on its only product and sells 47,000 units. Gwyneth inc. is considering cutting its sales price by $2 to generate an increase in sales of 13,000 units. How will this change affect its operating income? OA. It will decrease operating income. $140,000 OB. It will increase operating income by $140,000. OC. It will decrease operating income by 594,000 OD. It will increase operating Income by $94,000.
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS