A manufacturing company provided the following information for May 2020: Sales 24,000 Variable costs 8,000 Fixed...
A manufacturing company provided the following information for May 2020: Sales 24,000 Variable costs 8,000 Fixed costs 5,000 Operating income £11,000 If sales double in June 2020, what is the projected operating income? a. £35,000 b. £22,000 c. £27,000 d. £11,000
Homework Answers
| Correct Option C i.e. 27,000 | |
| Contribution margin income statement(Original) | |
| Sales | 24,000 |
| Less: Variable cost | 8,000 |
| Contribution margin | 16,000 |
| Less: Fixed Cost | 5,000 |
| Operating income | 11,000 |
| Contribution margin income statement(If sale is double) | |
| Sales | 48,000 |
| Less: Variable cost | 16,000 |
| Contribution margin | 32,000 |
| Less: Fixed Cost | 5,000 |
| Operating income | 27,000 |
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