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shtirl [24]
3 years ago
12

Titanic Roofing Company has estimated the following amounts for its next fiscal​ year: Total fixed costs $ 833 comma 000 Sale pr

ice per unit 60 Variable cost per unit 30 If the company spends an additional $ 30 comma 000 on​ advertising, sales volume would increase by 2 comma 500 units. Before the​ change, the​ company's sales level exceeds the breakeven point. What effect will this decision have on the operating income of​ Titanic? A. Operating income will decrease by $ 45 comma 000. B. Operating income will increase by $ 45 comma 000. C. Operating income will increase by $ 75 comma 000. D. Operating income will increase by $ 150 comma 000.
Business
1 answer:
vitfil [10]3 years ago
4 0

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

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2 years ago
Peterson Photoshop sold $1,300 in gift cards on a special promotion on October 15, 2021, and sold $1,950 in gift cards on anothe
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Answer:

$1,300

Explanation:

Given that,

On November 15, 2021

sold gift cards = $1,950

Of the gift cards sold in November,

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Redeemed in December = $455

Therefore, the deferred revenue is as follows

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= $1,950 - ($195 + $455)

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4 0
3 years ago
[based on the results of the simulation, can policy market interventions cause a change in consumer or producer surplus? explain
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6 0
1 year ago
Whitman has a direct labor standard of 2 hours per unit of output. Each employee has a standard wage rate of $26.50 per hour. Du
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Answer:

$137,800

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thus

Flexible budget amount for direct labor = 2 x 2,600 units x $26.50 = $137,800

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2 years ago
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