If sales increase by 100 units,by how much should net income increase?

Question

Quizplus · Accepted Answer

We are not provided with any information about the price per unit, cost per unit, or any other expenses. Therefore, we cannot calculate the exact increase in net income. However, we can use the following equation to estimate the increase in net income:

Increase in net income = (Increase in sales) x (Net profit margin)

Assuming a net profit margin of 15%, the increase in net income would be:

Increase in net income = 100 x 0.15 = $15

Therefore, the closest answer choice to $15 is B, which is $1,500.

If Sales Increase by 100 Units,by How Much Should Net