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Yuri [45]
3 years ago
10

One of Simplex Company’s products has a contribution margin of $44,000 and fixed costs totaling $54,000. If the product is dropp

ed, $37,000 of the fixed costs will continue unchanged. As a result of dropping the product, the company’s net operating income should:
Business
1 answer:
levacccp [35]3 years ago
5 0

Answer:

Decrease by $27000

Explanation:

Given that

Contribution margin = 44000

Initial fixed cost = 54000

Final fixed cost = 37000

Recall that

Net operating income = Contrubution Margin - Net fixed cost.

NOI = 44000 - (54000 - 37000)

NOI = 44000 - 17000

NOI = $27000

Thus, Net operating income decreased by 27000.

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3 0
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On December 1, 2021, the company received $9,000 in cash from another company that is renting office space in Falwell’s building
MrMuchimi

Answer:

From all indications,the two rents received have been posted wrongly, I want to believe that you are required to post the adjusting entries,hence my answer below:

The first $9000 was posted to deferred revenue,whereas only two months should have been

First rent:

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CR Deferred revenue    $6000

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