Question

Lister Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) $ 90,000 Variable expenses 58,500 Contribution margin 31,500 Fixed expenses 21,000 Net operating income $ 10,500 If sales increase to 3,040 units, the increase in net operating income would be closest to:______

Answer 1

Answer:

Net income= $10,920

Explanation:

Giving the following information:

Total Contribution margin 31,500

Fixed expenses 21,000

First, we need to calculate the unitary contribution margin:

Unitary contribution margin= 31,500 / 3,000= $10.5

Now, we can determine the net income if sales are 3,040 units:

Total contribution margin= 31,920

Fixed expenses= (21,000)

Net income= 10,920