Question
Total Sales (2,000 units) $500,000 Less Variable Costs $360,000 Contribution Margin $140,000 Less Fixed Costs $125,000 Net Operating Income $ 15,000 The information above represents
Total | |
Sales (2,000 units) | $500,000 |
Less Variable Costs | $360,000 |
Contribution Margin | $140,000 |
Less Fixed Costs | $125,000 |
Net Operating Income | $ 15,000 |
The information above represents the contribution format income statement of Global Agriculture Suppliers Inc. for agriculture equipment supplied to the Guyana market. The marketing manager of the company argues that if they increase their advertising budget by $2,500 and increase the selling price by 5% the company would be able to attract government contracts to supply to local farmers. Ultimately, a 15% increase in sales would occur.
Which one of the following would be the net operating income if the changes were made?
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Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
22nd Edition
324401841, 978-0-324-6250, 0-324-62509-X, 978-0324401844
