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Mountville's results for the year and the potential new investment are shown below. The new investment is approved and expected to create sales of
Mountville's results for the year and the potential new investment are shown below. The new investment is approved and expected to create sales of $100,000, a contribution margin of 70% of sales and added fixed costs of $40,000. If the manager gets a bonus of 10% of Residual income, what is the change in bonus expected for next year expected to be (assume rest of firm operates same as last year)? Express as a whole number. Sales Variable expenses Fixed expenses $1,000,000 $300,000 $500,000 Average operating assets $800,000 Minimum rate of return 6% New investment $268,000
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