Certosimo Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
Required:
a. If sales increase to 7,040 units, what would be the estimated increase in net operating income?
b. If sales decline to 6,900 units, what would be the estimated net operating income?

Question

Certosimo Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.

Required:
a. If sales increase to 7,040 units, what would be the estimated increase in net operating income?
b. If sales decline to 6,900 units, what would be the estimated net operating income?

Steven Tyler · Accepted Answer

Final Answer : a. The increase in net operating income would be the increased contribution margin because fixed expenses are not affected.    b.

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