Spice Inc.'s unit selling price is $51, the unit variable costs are $35, fixed costs are...
Spice Inc.'s unit selling price is $51, the unit variable costs are $35, fixed costs are $110,000, and current sales are 10,200 units. How much will operating income change if sales increase by 5,700 units?
a.$163,200 decrease
b.$254,400 increase
c.$163,200 increase
d.$91,200 increase
Homework Answers
Answer
--Correct Answer = Option 'D' Net Operating income will increase by $ 91,200
--Working
| per unit | at 10200 units | Additional 5700 units | |
| Selling price | $51 | $520,200 | $290,700 |
| Variable cost | $35 | $357,000 | $199,500 |
| Contribution margin | $16 | $163,200 | $91,200 |
| Total Fixed cost | $110,000 | $0 | |
| Net Income | $53,200 | $91,200 = Answer |
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4)
5)
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