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Sheridans managers have determined that variable costs per unit will increase by 15% beginning next month. To offset this increase in costs, they are considering
Sheridans managers have determined that variable costs per unit will increase by 15% beginning next month. To offset this increase in costs, they are considering a 12% increase in the sales price. Market research indicates that the price increase will result in a 3% decrease in the number of learning systems Sheridan sells. What will be Sheridans expected operating income if the price increase is implemented? (Round per unit calculations to 2 decimal places e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.)
Sheridan sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: Total Per Unit Sales revenue $572,000 $52 Variable expenses 171,600 15.60 Contribution margin 400,400 $36.40 Fixed expenses 294,000 Operating income $ 106,400Step by Step Solution
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