Answer:
Option (c) is correct.
Explanation:
Given that,
Sales (6,000 units) = $ 300,000
Variable expenses = $240,000
Contribution margin = $60,000
Fixed expenses = $59,000
Net operating income = $1,000
Contribution margin per unit:
= Contribution margin ÷ Number of units sold
= $60,000 ÷ 6,000 units
= $10 per unit
If sales increase to 6,020 units,
Contribution margin:
= Contribution margin per unit × Number of units sold
= $10 × 6,020 units
= $60,200
Net operating income:
= Contribution margin - Fixed cost
= $60,200 - $59,000
= $1,200
Increase in net operating income:
= $1,200 - $1,000
= $200
