Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Sales (12,000 units) $175,000
Variable expenses 100,000
Contribution margin 75,000
Fixed expenses 62,500
Net operating income $ 12,500
First, we need to calculate the unitary selling price and unitary variable cost:
Unitary selling price= 175,000/12,000= $14.58
Unitary variable cost= 100,000/12,000= $8.33
New income statement:
Sales= (12,000*1.10)*14.58= 192,456
Variable cost= 13,200*8.33= (109,956)
Contribution margin= 82,500
Fixed expenses= (62,500)
Net operating income= 20,000
