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Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last years operations appear below: Urban Rural Sales $ 320,000 $ 80,000 Variable
Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last years operations appear below:
Urban | Rural | |
---|---|---|
Sales | $ 320,000 | $ 80,000 |
Variable expenses | 208,000 | 56,000 |
Contribution margin | 112,000 | 24,000 |
Traceable fixed expenses | 48,000 | 30,000 |
Segment margin | $ 64,000 | $ (6,000) |
Azuki's common fixed expenses were $25,000 last year.
If Urban sales were 10% higher last year, by approximately how much would Azuki's net operating income have increased? (Assume no change in selling prices, unit variable expenses, or total fixed expenses.)
$11,200
$32,000
$4,400
$6,400
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