Reynold Enterprises sells a single product for $25.The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales.The company's net operating income will increase by $5 if one more unit is sold.

Question

Quizplus · Accepted Answer

The net operating income will increase by $10 if one more unit is sold, as the contribution margin per unit is $10 ($25 selling price - $15 variable expense). Fixed expenses do not change with the number of units sold.

Reynold Enterprises Sells a Single Product for $25