Smith Company produces and sells a single product and prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):              Sales $ 20,300       Variable expenses   12,100             Contribution margin   8,200       Fixed expenses   6,232             Net operating income $ 1,968                 Required: If the variable cost per unit increases by $1.10, spending on advertising increases by $1,600, and unit sales increase by 250 units, what would be the net operating income? (Do not round intermediate calculations.)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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Smith Company produces and sells a single product and prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

  
 

     
  Sales $ 20,300    
  Variable expenses   12,100    
     
  Contribution margin   8,200    
  Fixed expenses   6,232    
     
  Net operating income $ 1,968    
     
 

   

Required:

If the variable cost per unit increases by $1.10, spending on advertising increases by $1,600, and unit sales increase by 250 units, what would be the net operating income? (Do not round intermediate calculations.)

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