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James Jordan Sales $2,000,000 $2,000,000 Variable Costs 1,000,000 400,000 Contribution margin 1,000,000 1,600,000 Fixed costs 800,000 1,400,000 Operating income $200,000 $ 200,000 If the sales

James Jordan

Sales $2,000,000 $2,000,000

Variable Costs 1,000,000 400,000

Contribution margin 1,000,000 1,600,000

Fixed costs 800,000 1,400,000

Operating income $200,000 $ 200,000

If the sales increase by 20%, with the variable cost per unit remaining constant and the fixed costs not changing, what will be the increase in operating income for each firm?

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