Sales $100,000 Variable Costs $60,000 Contribution Margin $40,000 Fixed Costs $30,000 Operating Income $10,000 The above...

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Question

Sales $100,000 Variable Costs $60,000 Contribution Margin $40,000 Fixed Costs $30,000 Operating Income $10,000 The above...

Sales	$100,000
Variable Costs	$60,000
Contribution Margin	$40,000
Fixed Costs	$30,000
Operating Income	$10,000

The above financial information was the result of selling 9,101 units. What would their new operating income be if they sold 10,588 units?

business accounting

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Answer 1

Answer #1

New operating income = $16,536

Working

Income statement
Sales (100000/9101 x 10588)	$116,338.86
Variable Costs (60000/9101 x 10588)	$ 69,803.32
Contribution Margin	$ 46,535.55
Fixed Costs	$ 30,000.00
Operating Income	$ 16,535.55

Fixed cost in total remains same whatever the activity level is.

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Answer 2

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