Question

Sjostrom Corporation has provided the following contribution format income statement. Assume that the following information i Sales (7,000 units) Variable expenses Contribution margin Fixed expenses Net operating income $280,000 182,000 98,000 84,000 $ 14,000 points If the variable cost per unit increases by $10, spending on advertising increases by $1,500, and unit sales increase by 15,800 un closest to: Choice O $5,700 $91,200 $114,100 ) $12,500

Answer 1

Sales Per unit($280,000/7000 units)	$                40
Less:Variable cost per unit($182,000/7000 units)	$                26
Contribution margin per unit	$                14
Revised Contribution margin Income Statement
Sales(22,800 units*$40)	$      9,12,000
Less:Variable cost(22,800 units*$36)	$      8,20,800
Contribution margin	$         91,200
Less:Fixed expenses($84,000+$1,500)	$         85,500
Net Operating Income	$           5,700
So Option A is the answer