Answer:
The correct option is <u>c. 129,000</u>.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Assume the following amounts:
Total fixed costs. $15,000
selling price per unit. $19
variable costs per unit. $12
if sales revenue per unit increases to $21 and 16,000 units are sold what is the operating income?
a 159,000
b. 336,000
c. 129,000
d. 144,000
The explanation to the answer is now provided as follows:
Since sales revenue per unit increases to $21, we use it as the selling price and proceed as follows:
Computation of Operating Income
<u>Particular Amount ($) </u>
Sales revenue (16,000 * $21) 336,000
Variable cost (16,000 * $12) <u> (195,000) </u>
Contribution 144,000
Fixed cost <u> (15,000) </u>
Operating income <u> 129,000 </u>
Therefore, the correct option is <u>c. 129,000</u>. That is, operatin income is $129,000.
