Answer:
c. Increase of $192,500
Explanation:
Note: The full question is attached
Particulars Luxury Amount$
Sales $950,000
(380000*250/100)
Less: Variable cost $612,500
(245000*250/100
) <u> </u>
Total contribution $337,500
Less: Fixed expenses <u>$80,000 </u>
Net Operating Income <u>$257,500</u>
Change in Operating Income = New Profit - Existing profit = $257,500 - $65,000 = $192,500
Hence, there is an increase of $192,500