Asked by Jacob Thomas on Jun 29, 2024
Verified
If the company increases its unit sales volume by 3% without increasing its fixed expenses, then total net operating income should be closest to:
A) $459,380
B) $453,667
C) $13,380
D) $482,660
Net Operating Income
Profit generated from a company's regular business operations, excluding deductions for interest and taxes.
Unit Sales Volume
The quantity of products sold by a company, not taking into account any discounts or returns.
- Analyze how changes in variable costs and sales volume affect net operating income.
Verified Answer
RE
Rodolph El HajjJul 04, 2024
Final Answer :
D
Explanation :
Unit sales = 520,000 units × 1.03 = 535,600 units
Unit selling price = $2,132,000 ÷ 520,000 units = $4.10 per unit
Variable manufacturing expense per unit = $650,000 ÷ 520,000 units = $1.25 per unit
Variable selling and administrative expense per unit = $260,000 ÷ 520,000 units = $0.50 per unit
Reference: CHO6-Ref8
Sjostrom Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.
Unit selling price = $2,132,000 ÷ 520,000 units = $4.10 per unit
Variable manufacturing expense per unit = $650,000 ÷ 520,000 units = $1.25 per unit
Variable selling and administrative expense per unit = $260,000 ÷ 520,000 units = $0.50 per unit
Reference: CHO6-Ref8Sjostrom Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.
Learning Objectives
- Analyze how changes in variable costs and sales volume affect net operating income.