A cement manufacturer has supplied the following data: If the company increases its unit sales volume by 5% without increasing its fixed expenses,then total net operating income should be closest to:

Question

A cement manufacturer has supplied the following data:  If the company increases its unit sales volume by 5% without increasing its fixed expenses,then total net operating income should be closest to:

Quizplus · Accepted Answer

Unit sales = 220,000 units × 1.05 = 231,000 units
Unit selling price = $924,000 ÷ 220,000 units = $4.20 per unit
Variable manufacturing expense per unit = $297,000 ÷ 220,000 units = $1.35 per unit
Variable selling and administrative expense per unit = $165,000 ÷ 220,000 units = $0.75 per unit
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A Cement Manufacturer Has Supplied the Following Data: If