Question
Glass Inc. has the following information for August 2015: Selling price $ 27 per unit Variable expenses $ 18 per unit Fixed expenses $ 8,010
Glass Inc. has the following information for August 2015:
Selling price | $ 27 | per unit | |
Variable expenses | $ 18 | per unit | |
Fixed expenses | $ 8,010 | per month | |
Actual Units Sold | 1,040 | ||
Required:
Prepare a Contribution Income Statement with the data provided.
If they spend an extra $1,000 a month in advertising, sales will increase by 100 units. Prepare a new Contribution Income Statement. Would their operating income increase or decrease?
If they decrease the selling price from $27 to $23, sales volume would increase by 50%. Prepare a new Contribution Income Statement. Would their operating income increase or decrease?
-Must show all calculations
Step by Step Solution
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