Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much?

Sales $50,000 Variable Costs $8,700 Fixed Costs $30,000

SOLUTION: 1) Calculate the total cost of FC and VC for $50,000. 2) Calculate the increase in VC based on the % increase in Sales. VC/50000 * new sales 3) Add FC and VC based on new Sales $$ 4) Compare total costs for both sales levels.