Use the following information to answer the questions below. Company 1 Company 2 Sales $50,000 $50,000 Variable Costs 10,000 5,000 Contribution Margin 40,000 45,000 Fixed Costs 30,000 40,000 Operating Income 10,000 5,000 A. 270% 1. If Company 1's sales increase by 30%, its operating income will increase by what percent? B. 150% 2. If Company 2's sales increase by 30%, its operating income will increase by what percent? C. 120%

Use the following information to answer the questions below. Company 1 Company 2 Sales $50,000 $50,000 Variable Costs 10,000 5,000 Contribution Margin 40,000 45,000 Fixed Costs 30,000 40,000 Operating Income 10,000 5,000 A. 270% 1. If Company 1's sales increase by 30%, its operating income will increase by what percent? B. 150% 2. If Company 2's sales increase by 30%, its operating income will increase by what percent? C. 120%

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...

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