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As a result of cost increases imposed by its primary supplier, Pronghorn Fishing Supplies Inc. has experienced an increase in its direct or variable costs
As a result of cost increases imposed by its primary supplier, Pronghorn Fishing Supplies Inc. has experienced an increase in its direct or variable costs per unit that will result in a decrease of 2% in the contribution margin ratio. Operating income last month, before the cost increase, was $2450 based on sales revenues of $29000 and fixed costs of $13790. If sales revenues increase next month by 5%, and the new variable costs come into effect, what can Pronghorn anticipate in terms of operating profit? $4033 $2653 $3213 $3034
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