Data pertaining the ABC Company is presented in the table below. ABC Company pro
ID: 2559499 • Letter: D
Question
Data pertaining the ABC Company is presented in the table below. ABC Company produces and sells a single product.
Fixed expenses are $344,000 per month. The company is currently selling 3,900 units per month.
What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)
Per Unit Percent of Sales Selling price $ 180 100% Variable expenses 54 30% Contribution margin $ 126 70%Explanation / Answer
Sales (3900 units, 4030 units × $180) . .................... $702000 $725400
Variable expenses
(3900 units × $54, 4030 units × $54). .................. 210600 217620
Contribution margin . ............................................... 491400 507780
Fixed expenses . .........................................................344000 344000
Net operating income . ............................................... 147400 163780
Increase in net operating income: 163780 - 147400 = $16380
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