Question
Parkins Company produces and sells a single product. The company's income statement for the most recent month isgiven below: Sales (6,000 units at $40 per
Parkins Company produces and sells a single product. The company's income statement for the most recent month isgiven below: Sales (6,000 units at $40 per unit) $ 240,000 Less manufacturing costs: Direct materials $ 48,000 Direct labor (variable) 60,000 Variable factory overhead 12,000 Fixed factory overhead 30,000 150,000 Gross margin 90,000 Less selling and other expenses: Variable selling and other expenses 24,000 Fixed selling and other expenses 42,000 66,000 Net operating income $ 24,000
There are no beginning or ending inventories.
What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses? |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started