The Pantovich Company is not happy with last year’s operating income of only $30,000. The selling...
The Pantovich Company is not happy with last year’s operating income of only $30,000. The selling price during the year was $15 per unit. The total variable costs were $180,000 and total fixed costs were $90,000. The sales manager wants to increase the selling price next year by 15% although she knows that the number of units sold would likely be reduced by 10%.
If her proposal is adopted and her assumption about volume of sales is correct, what would the new operating income be?
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