Spice Inc.'s unit selling price is $46, unit variable costs are $36, fixed costs are $116,000,...
Spice Inc.'s unit selling price is $46, unit variable costs are $36, fixed costs are $116,000, and current sales are 9,000 units.
How much will operating income change if sales increase by 5,500 units?
a.$90,000 decrease
b.$145,000 increase
c.$55,000 increase
d.$90,000 increase
Homework Answers
Answer is “$55,000 increase”
Selling price per unit = $46
Variable cost per unit = $36
Increase in unit sales = 5,500
Contribution margin per unit = Selling price per unit - Variable
cost per unit
Contribution margin per unit = $46 - $36
Contribution margin per unit = $10
Increase in operating income = Contribution margin per unit *
Increase in unit sales
Increase in operating income = $10 * 5,500
Increase in operating income = $55,000
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Spice Inc.'s unit selling price is $46, unit variable costs are
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1)
2)
3)
4)
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