Exhibit 21-3 The following partial income statement is available for Lauria Company:

-Refer to Exhibit 21-3. Given the data above, at an activity level of 5,000 units, net income would increase by:

Question

Exhibit 21-3 The following partial income statement is available for Lauria Company:

-Refer to Exhibit 21-3. Given the data above, at an activity level of 5,000 units, net income would increase by:

Quizplus · Accepted Answer

To calculate the increase in net income, we need to calculate the difference between the income at the current activity level (4,000 units) and the income at the new activity level (5,000 units). 
Current income at 4,000 units = $60,000 + ($12 × 4,000) - ($8 × 4,000) = $100,000 
New income at 5,000 units = $60,000 + ($12 × 5,000) - ($8 × 5,000) = $122,500 
Increase in net income = $122,500 - $100,000 = $22,500 
Therefore, the correct answer is C.

Exhibit 21-3 the Following Partial Income Statement Is Available for Lauria