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Taylor Company has current sales of 1,000 units, which generates sales revenue of $190,000, variable costs of $76,000, and fixed expenses of $96,000. The company believes sales will increase by 300 units, if advertising increases by $20,000. What is the change in net operating income after the changes? O Increase of $20,000 O Decrease of $20,000 O Increase of $14,200 O Decrease of $12,000

Taylor Company has current sales of 1,000 units, which generates sales revenue of $190,000, variable costs of $76,000, and fixed expenses of $96,000. The company believes sales will increase by 300 units, if advertising increases by $20,000. What is the change in net operating income after the changes? O Increase of $20,000 O Decrease of $20,000 O Increase of $14,200 O Decrease of $12,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Knowledge Check 01** Taylor Company has current sales of 1,000 units, which generates sales revenue of $190,000, variable costs of $76,000, and fixed expenses of $96,000. The company believes sales will increase by 300 units if advertising increases by $20,000. What is the change in net operating income after the changes? - ○ Increase of $20,000 - ○ Decrease of $20,000 - ○ Increase of $14,200 - ○ Decrease of $12,000
Transcribed Image Text:**Knowledge Check 01** Taylor Company has current sales of 1,000 units, which generates sales revenue of $190,000, variable costs of $76,000, and fixed expenses of $96,000. The company believes sales will increase by 300 units if advertising increases by $20,000. What is the change in net operating income after the changes? - ○ Increase of $20,000 - ○ Decrease of $20,000 - ○ Increase of $14,200 - ○ Decrease of $12,000
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