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increase of $7,000
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increase of $12,800
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decrease of $5,800
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decrease of $7,000
Homework Answers
Current operating income = Sales - Variable costs - Fixed costs
= (5,400 * $160) - (5,400 * $80) - $205,000
= $227,000
New sales units = 5,400 + 160 = 5,560
New fixed costs = $205,000 + $5,800 = $210,800
New operating income = Sales - Variable costs - Fixed costs
= (5,560 * $160) - (5,560 * $80) - $210,800
= $234,000
Increase in operating income = $234,000 - $227,000
= $7,000
The answer is Increase of $7,000
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increase of $7,000
increase of $12,800
decrease of $5,800
decrease of $7,000
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