Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vacaro corporation produces and sells a single prodcut . Data concerning appears below. Per Unit Percent of sales Selling price 140 100% Variable expenses 28

Vacaro corporation produces and sells a single prodcut . Data concerning appears below.

Per Unit Percent of sales

Selling price 140 100%

Variable expenses 28 20%

Contribution Margin $112 80%

Fiexed expenses are $293,000 per month. The company is currently selling 3000 units per month. Management is considering using a new component that would increase the unit variable cost by $13. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change?

Please show working !

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smoke And Mirrors Inc Accounting For Capitalism

Authors: Nicolas Vron, Matthieu Autret, Alfred Galichon, George Holoch

1st Edition

0801444160, 978-0801444166

More Books

Students also viewed these Accounting questions

Question

3. What are the marketing uses of social networks?

Answered: 1 week ago