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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?

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Answers (1)
  1. 29 December, 05:04
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    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
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Home » Business » 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?
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