Answer:
Net operating income= 10,400
Explanation:
Giving the following information:
Sales (2,000 units) $40,000
Variable expenses 24,000
Contribution margin 16,000
Fixed expenses 11,200
Net operating income $4,800
If the selling price increases by $4 per unit and the sales volume decreased by 200 units:
First, we need to determine the unitary selling price and unitary variable cost:
Selling price= 40,000/2,000= $20 + $4= $24
UNitary variable cost= 24,000/2,000= $12
Now, we can calculate the new net operating income:
Sales= 1,800*24= 43,200
Variable cost= 1,800*12= (21,600)
Contribution margin= 21,600
Fixed costs= (11,200)
Net operating income= 10,400
