Question

Spice Inc.'s unit selling price is $60, the unit variable costs are $35, fixed costs are $125,000, and current sales are 10,000 units. How much will operating income change if sales increase by 8,000 units?a. $175,000 increaseb. $200,000 increasec. $150,000 increased. $150,000 decrease

Answer 1

Answer:

Increase by $200,000

Explanation:

Giving the following information:

Spice Inc.'s unit selling price is $60, the unit variable costs are $35, fixed costs are $125,000, and current sales are 10,000 units. How much will operating income change if sales increase by 8,000 units?

Effect on income= (60 - 35)*8,000= $200,000