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Question: Accounting A company has provided the following data: Sales Sales price Variable cost Fixed cost 4,000 units $80 per unit $50 per unit $30,000 If the dollar contribution margin per unit is increased by 10 percent, total fixed cost is decreased by 15 percent, and all other factors remain the same, will net operating income increase or decrease? By how much?

Question: Accounting A company has provided the following data: Sales Sales price Variable cost Fixed cost 4,000 units $80 per unit $50 per unit $30,000 If the dollar contribution margin per unit is increased by 10 percent, total fixed cost is decreased by 15 percent, and all other factors remain the same, will net operating income increase or decrease? By how much?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 17E
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Question: Accounting A company has provided the following data: Sales Sales price Variable cost Fixed cost 4,000 units $80 per unit $50 per unit $30,000 If the dollar contribution margin per unit is increased by 10 percent, total fixed cost is decreased by 15 percent, and all other factors remain the same, will net operating income increase or decrease? By how much?
Transcribed Image Text:Question: Accounting A company has provided the following data: Sales Sales price Variable cost Fixed cost 4,000 units $80 per unit $50 per unit $30,000 If the dollar contribution margin per unit is increased by 10 percent, total fixed cost is decreased by 15 percent, and all other factors remain the same, will net operating income increase or decrease? By how much?
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