Answer:
decrease by $16,000
Explanation:
We know that,
The net income = Sales - variable cost - fixed expense
The sales = Sales units × selling price per unit
= 50,000 boxes × $25
= $1,250,000
The variable cost = Sales units × variable cost per unit
= 50,000 boxes × $17
= $850,000
And, the fixed cost is $260,000
So, the net income would equal to
= $1,250,000 - $850,000 - $260,000
= $140,000
Since, the sales units are increased by $24,000 units, so new sales units is 74,000 units
And, the sales per unit is decreased by 2 So, new sales per unit is $23
So, the new sales
= Sales units × selling price per unit
= $74,000 × $23 = $1,702,000
The variable cost = Sales units × variable cost per unit
So, the new variable cost equals to
= 74,000 units × $17
= $1,258,000
And the fixed expense would increased by the $60,000 so new fixed cost is $320,000
So, the new net income would be equal to
= $1,702,000 - $1,258,000 - 320,000
= $124,000
If we compare these two net income, then the difference would be
= $140,000 - $124,000
= $16,000 decrease
