Question
I need help with this one Nice Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales
I need help with this one
Nice Corporation produces and sells a single product. Data concerning that product appear below:
Per Unit | Percent of Sales | ||||||||||
Selling price | $ | 280 | 100 | % | |||||||
Variable expenses | 42 | 15 | % | ||||||||
Contribution margin | $ | 238 | 85 | % | |||||||
Fixed expenses are $200,000 per month. The company is currently selling 1,900 units per month.
Required:
Management is considering using a new component that would increase the unit variable cost by $58. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 600 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amount should be indicated by a minus sign.)
Nice Corporation produces and sells a single product. Data concerning that product appear below Percent of Per Unit $ 280 Selling price Variable expenses Contribution margin Sales 100% 15% 85% 42 S 238 Fixed expenses are $200,000 per month. The company is currently selling 1,900 units per month Required: Management is considering using a new component that would increase the unit variable cost by S58. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 600 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? (Negative amount should be indicated by a minus sign.) hange in net operating income
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