A company's manager estimates that in the upcoming year, total variable costs will increase by $7,500 and total fixed costs will increase by $3,500. Assume that the unit sales price did not change. What will be the anticipated effect on net operating income?

Question

Quizplus · Accepted Answer

Net operating income will decrease by the total amount of the increase in costs ($7,500 + $3,500 = $11,000), assuming sales and unit price remain constant.

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