A company's manager estimates that in the upcoming year,total variable costs will increase by $5000 and total fixed costs will increase by $3000.What will be the anticipated effect on net income?

Question

Quizplus · Accepted Answer

Net income will decrease by $8000 because the total costs (variable + fixed) are increasing by $8000, reducing the net income by the same amount if revenues remain constant.

A Company's Manager Estimates That in the Upcoming Year,total Variable