If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:

A) $12,240
B) $318,240
C) $360,400
D) $311,973

Question

If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:A) $12,240B) $318,240C) $360,400D) $311,973

Zybrea Knight · Accepted Answer

Final Answer : C, Explanation :  Unit sales = 680,000 units × 1.04 = 707,200 unitsUnit selling price = $2,788,000 ÷ 680,000 units = $4.10 per unitVariable manufacturing expense per unit = $1,156,000 ÷ 680,000 units = $1.70 per unitVariable selling and administrative expense per unit = $272,000 ÷ 680,000 units = $0.40 per unit   Reference: CHO6-Ref7A tile manufacturer has supplied the following data:

If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:

A) $12,240
B) $318,240
C) $360,400
D) $311,973

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