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Titanic Roofing Company has estimated the following amounts for its next fiscal year. Total fixed costs Sale price per unit Variable cost per unit $840,000 $40 $25 If the company spends an additional $35,000 on advertising, sales volume would increase by 2,500 units. Before the change, the company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of Titanic? OA. Operating income will increase by $100,000. OB. Operating income will decrease by $2,500. OC. Operating income will increase by $2,500. On Operating income will increase by $37.500

Titanic Roofing Company has estimated the following amounts for its next fiscal year. Total fixed costs Sale price per unit Variable cost per unit $840,000 $40 $25 If the company spends an additional $35,000 on advertising, sales volume would increase by 2,500 units. Before the change, the company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of Titanic? OA. Operating income will increase by $100,000. OB. Operating income will decrease by $2,500. OC. Operating income will increase by $2,500. On Operating income will increase by $37.500

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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Titanic Roofing Company has estimated the following amounts for its next fiscal year: Total fixed costs Sale price per unit $840,000 $40 $25 Variable cost per unit If the company spends an additional $35,000 on advertising, sales volume would increase by 2,500 units. Before the change, the company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of Titanic? OA. Operating Income will increase by $100,000. OB. Operating income will decrease by $2,500. OC. Operating income will increase by $2,500. OD. Operating income will increase by $37,500.
Transcribed Image Text:Titanic Roofing Company has estimated the following amounts for its next fiscal year: Total fixed costs Sale price per unit $840,000 $40 $25 Variable cost per unit If the company spends an additional $35,000 on advertising, sales volume would increase by 2,500 units. Before the change, the company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of Titanic? OA. Operating Income will increase by $100,000. OB. Operating income will decrease by $2,500. OC. Operating income will increase by $2,500. OD. Operating income will increase by $37,500.
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