Answer: B. Operating income will increase by $ 45,000
Explanation:
Total fixed cost = $833,000
Sale price per unit = 60
Variable cost per unit = 30
Advertising = $30,000
Increase in sales volume = 2500
The contribution margin is the difference between the sales price per unit and the variable cost per unit.
= 60 - 30
= 30
Therefore, Hence the increase in the contribution margin will be:
= ($30 × 2500)=$75000
We then subtract the additional cost of $30,000 from $75,000. This will be:
= $75,000 - $30,000
= $45,000
Therefore, operating income will increase by $45,000
Answer:
c) $465,000
Explanation:
The amount of pension expense reported for 2018 can be calculated using only the relevant data in the question as follows:
Pension expenses = Service cost + (Beginning of year Projected benefit obligation × 10%) - (Beginning of year fair value of plan assets × 10%)
Therefore, we have:
Pension expenses = $
345,000 + ($3,600,000 × 10%) - ($2,400,000 × 10%) = $465,000
Therefore, the amount of pension expense reported for 2018 is $465,000.
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