Ask Question
26 August, 18:29

Prince Paper has budgeted the following amounts for its next fiscal year: Total fixed expenses $ 600 comma 000 Selling price per unit $ 70 Variable expenses per unit $ 45 If Price Paper spends an additional $ 12 comma 300 on advertising, sales volume should increase by 3 comma 000 units. What effect will this have on operating income?

+2
Answers (1)
  1. 26 August, 18:34
    0
    Operating income will increase by $63,000

    Explanation:

    Given:

    Sales volume increase = 3,000 units

    Particular Amount

    Increase in Sales $210,000 ($70*3000)

    Less: Increase in Variable cost $135,000 ($45*3000)

    Less: Increase additional Costs $12,000

    Chane in Net operating Income $63,000

    Operating income will increase by $63,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Prince Paper has budgeted the following amounts for its next fiscal year: Total fixed expenses $ 600 comma 000 Selling price per unit $ 70 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers