Question 1:

Junior Bodway, Inc., has provided the following budgeted data: [10]

Sales .................................. 10,000 units

Selling price ...................... $50 per unit

Variable expense ............... $35 per unit

Fixed expense .................... $180,000

Requirements:

1. If the company sales increased by $ 1,00,000 and Advertising expenditure is $ 10,000 then how much net operating income will be increased?
2. Calculate the DOL and if sales increased by 10% then how much % of profit will be increased.