Answer:
(C) $10,400
Explanation:
We know that,
The net income = Sales - variable cost - fixed expense
Since, the sales units are decreased by 200 units, so new sales units is 1,800 units
And, the sales per unit is increased by 4 So, the sale per unit equals to
= Total sales ÷ number of units
= $40,000 ÷ 2,000 units
= $20
So, new sales per unit is $24
So, the new sales
= Sales units × selling price per unit
= $1,800 × $24 = $43,200
The variable cost = Sales units × variable cost per unit
where,
Variable cost per unit = Total variable cost ÷ number of units
= $24,000 ÷ 2,000 units
= $12
So, the new variable cost equals to
= 1,800 units × $12
= $21,600
And the fixed expense would remain the same
So, the net income would be equal to
= $43,200 - $21,600 - $11,200
= $10,400
