Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Services And Markets

Authors: Dr. Punithavathy Pandian

8125931201, 978-8125931201

More Books

Students also viewed these Accounting questions

Question

What is Aufbau's rule explain with example?

Answered: 1 week ago