Assume the following amounts: $$\begin{array} { | l | r | }
\hline \text { Tatal fixed costs } & \$ 20,000 \
\hline \text { Sale price per unit } & \$ 24 \
\hline \text { Variable costs per urit } & \$ 15 \
\hline
\end{array}$$ If sales revenue per unit decreases to $22 and 10,000 units are sold,what is the operating income?

Question

Assume the following amounts: $$\begin{array} { | l | r | } 
\hline \text { Tatal fixed costs } & \$ 20,000 \
\hline \text { Sale price per unit } & \$ 24 \
\hline \text { Variable costs per urit } & \$ 15 \
\hline
\end{array}$$ If sales revenue per unit decreases to $22 and 10,000 units are sold,what is the operating income?

Quizplus · Accepted Answer

Operating income = (Sales revenue - Variable costs - Fixed costs)= (22 * 10,000) - (15 * 10,000) - 20,000= 220,000 - 150,000 - 20,000= $50,000

Assume the Following Amounts If Sales Revenue Per Unit Decreases to $22 and 10,000