Orion Enterprises has variable costs equal to 45% of sales. The company is considering a proposal that will increase sales by $12,000 and total fixed costs by $7,000. By what amount will net income increase?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7EB: Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are...
Question

What amount will net income increase?

Orion Enterprises has variable costs equal to 45% of sales.
The company is considering a proposal that will increase sales
by $12,000 and total fixed costs by $7,000.
By what amount will net income increase?
Transcribed Image Text:Orion Enterprises has variable costs equal to 45% of sales. The company is considering a proposal that will increase sales by $12,000 and total fixed costs by $7,000. By what amount will net income increase?
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