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A company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much? Please use
A company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much? Please use the solution below and where the numbers go, Im getting confused.
Sales $50,000
Variable Cost $9.800
Fixed Cost $30,000
Solution formula is below
1) Calculate the total cost of FC and VC for $50,000.
2) Calculate the increase in VC based on the % increase in Sales. VC/50000 * new sales
3) Add FC and VC based on new Sales $$
4) Compare total costs for both sales levels.
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