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?

Question

John Ruiz

Business

29 December, 05:01

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?

+3

Answers (1)

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Isabell Johnston · Answer 1

Operating income At 10,588 units

Sales ($100,000/9101) * 10588 116,339

Less Variable Costs ($60,000/9101) * 10588 69,803

Contribution 46,536

Less Fixed Cost 30,000

Operating Income 16,536

Explanation:

At 10588 units

Sales are variable with level of activity

Variable Cost will vary with the level of activity

Fixed Costs will remain the same

Sales $100,000Variable Costs $60,000Contribution Margin $40,000Fixed Costs $30,000Operating Income $10,000The above financial information was the result of selling 9,101 units. What would their new operating income be if they sold 10,588 units?

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?