Your manager has asked you to determine the impact of certain costs on profits and communicate this information to management. They give you the following costs: Variable costs: $3 per item Fixed costs: $2,500 per month If all other costs remain the same, what will happen to net income if sales double? a) Profit will decrease b) Profit will increase c) The profit will remain the same d) These types of costs will have no effect on income
Your manager has asked you to determine the impact of certain costs on profits and communicate this information to management. They give you the following costs: Variable costs: $3 per item Fixed costs: $2,500 per month If all other costs remain the same, what will happen to net income if sales double? a) Profit will decrease b) Profit will increase c) The profit will remain the same d) These types of costs will have no effect on income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Your manager has asked you to determine the impact of certain costs on profits and
communicate this information to management. They give you the following costs: Variable
costs: $3 per item Fixed costs: $2,500 per month If all other costs remain the same, what will
happen to net income if sales double? a) Profit will decrease b) Profit will increase c) The
profit will remain the same d) These types of costs will have no effect on income
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