crease by 5,800 units? a. $81,200 increase b. $152,600 increase $54, the unit variable costs are $40, fixed cos
crease by 5,800 units? a. $81,200 increase b. $152,600 increase $54, the unit variable costs are $40, fixed cos
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Spice Inc.'s unit selling price is $54, the unit variable costs are $40, fixed costs are $117,000, and current sales are 10,900 units. How much will operating income change if sales
increase by 5,800 units?
Oa. $81,200 increase
Ob. $152,600 increase
Oc. $233,800 increase
Od. $152,600 decrease](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78c00f8e-d71a-411e-aae1-c1d19bd9af20%2F008e5126-a03e-458a-a673-65cb160ff6a7%2F7qzi9y_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Spice Inc.'s unit selling price is $54, the unit variable costs are $40, fixed costs are $117,000, and current sales are 10,900 units. How much will operating income change if sales
increase by 5,800 units?
Oa. $81,200 increase
Ob. $152,600 increase
Oc. $233,800 increase
Od. $152,600 decrease
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Answer :
Calculation of operating income change if sales volume increase by 5800 units :
Operating income increase (Decrease) = Increase in sales unit * (Selling price per unit - variable cost of per unit)
Operating income increase (Decrease) = 5,800 * ($54 - $40)
Operating income increase (Decrease) = $81,200 Increase
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