Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $80 per unit. Variable expenses are $40.00 per unit, and fixed expenses total $180,000 per year. Its operating results for last year were as follows:
Sales $ 2,080,000
Variable expenses 1,040,000
Contribution margin 1,040,000
Fixed expenses 180,000
Net operating income $ 860,000
If this year's sales increase by $57,000 and fixed expenses do not change, how much will net operating income increase? (I thought it would increase by $28520 but I must be missing something.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started