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The Following Income Statements Are Provided for Two Companies Operating

Question 30

Multiple Choice

The following income statements are provided for two companies operating in the same industry: ReverueVariable costsContribution marginFixed costsNet income Felix Company $200,000(25,000) 175,000(70,000) $105,000 Jinx Compeny $200,000(70,000) 130,000(25,000) $105,000\begin{array}{c}\begin{array}{|l|}\hline\\\hline \text {Reverue}\\\hline \text {Variable costs}\\\hline \text {Contribution margin}\\\hline \text {Fixed costs}\\\hline \text {Net income}\\\hline\end{array}\begin{array}{l|}\hline\text { Felix Company }\\\hline\$ 200,000 \\\hline (25,000) \\\hline 175,000 \\\hline (70,000) \\\hline \$ 105,000\\\hline \end{array}\begin{array}{l|}\hline\text { Jinx Compeny }\\\hline\$ 200,000 \\\hline (70,000) \\\hline 130,000 \\\hline(25,000) \\\hline \$ \quad 105,000\\\hline \end{array}\end{array}
Assuming sales increase by $1,000,select the correct statement from the following:


A) Felix's net income will be more than Jinx's.
B) Only Felix will experience an increase in profit.
C) Felix's net income will increase by $250.
D) Jinx's net income will increase by 6%.

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