Answer:
(A) $420.00
Explanation:
We know that,
The net income = Sales - variable cost - fixed expense
Since, the sales units are increased by 40 units, so new sales units is 3,040 units
So, the sale per unit equals to
= Total sales ÷ number of units
= $90,000 ÷ 3,000 units
= $30
So, the new sales
= Sales units × selling price per unit
= $3,040 × $30 = $91,200
The variable cost = Sales units × variable cost per unit
where,
Variable cost per unit = Total variable cost ÷ number of units
= $58,500 ÷ 3,000 units
= $19.5
So, the new variable cost equals to
= 3,040 units × $19.5
= $59,280
And the fixed expense would remain the same
So, the net income would be equal to
= $91,200 - $59,280 - $21,-00
= $10,920
The net income given is $10,500
So, the difference equals to
= $10,920 - $10,500
= $420
