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The Following Income Statements Are Provided for Two Companies Operating

Question 40

Multiple Choice

The following income statements are provided for two companies operating in the same industry Felix Company  Jinx Company Revenue$200,000$200,000 Variable costs(25,000) (70,000) Contribution margin 175,000130,000Fixed costs (70,000) (25,000) Net income $105,000$105,000\begin{array} { l }& \text {Felix Company }& \text { Jinx Company} \\ \text { Revenue}&\$200,000&\$200,000\\ \text { Variable costs}&(25,000) &(70,000) \\ \text {Contribution margin }&175,000&130,000\\ \text {Fixed costs }&(70,000) &(25,000) \\ \text {Net income }&\$105,000&\$105,000\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) Both companies 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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