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Last year, Park, Inc., sold 50,000 units. The contribution margin ratio was 35%. Total fixed costs were $75,000. Assume that an increase in unit sales
Last year, Park, Inc., sold 50,000 units. The contribution margin ratio was 35%. Total fixed costs were $75,000. Assume that an increase in unit sales will lead to an increase in total sales by $120,000 next year. If cost behavior patterns remain unchanged, by how much will the company's net operating income change?
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A). Net operating income will decrease by $33,000
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B). Net operating income will increase by $42,000
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C). Net operating income will increase by $45,000
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D). Net operating income will increase by $78,000
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