The income statement of Sheffield Corp. for 2020 included the following items: Interest revenue $137000 Salaries and wages expen
1 answer:
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Answer:
(B) decrease of $200
Explanation:
As for the information provided,
Current net income = Contribution - Fixed cost
Contribution = $60 5,000 = $300,000
Fixed cost = $243,000
Thus, net income = $57,000 = $300,000 - $243,000
Now after the revised advertisement plan
Fixed cost = $243,000 + $11,000 = $254,000
Then contribution = $60 5,180 = $310,800
Net income = $310,800 - $254,000 = $56,800
The difference in old and new income = $57,000 - $56,800 = $200 decrease.
Therefore, correct option is:
Option B