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The Income Statement for Sapphire Manufacturing Company for 2018 Is

Question 112

Multiple Choice

The income statement for Sapphire Manufacturing Company for 2018 is as follows:  Sales (20,000 units)  $150,000 Variable expenses 50,000 Contribution margin $100,000 Fixed expenses 30,000 Operating income $70,000\begin{array}{lr}\text { Sales (20,000 units) } & \$ 150,000 \\\text { Variable expenses } & 50,000\\\text { Contribution margin } & \$ 100,000 \\\text { Fixed expenses } & 30,000\\\text { Operating income } & \$ 70,000\end{array}
If sales increase by 2,000 units, what will happen to profit?


A) Profit will increase by $13,000.
B) Profit will increase by $10,000.
C) Profit will decrease by $15,000.
D) Profit will decrease by $18,000.

Correct Answer:

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