operating income

Calderon Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Selling price Variable expenses Contribution margin Percent of Sales 190 100% $ 38 152 $ 20% 80% Fixed expenses are $110,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by $56. Since the new component would improve the company’s product, the marketing manager predicts that monthly sales would increase by 500 units. Required: What should be the overall effect on the company’s monthly net operating income of this change if fixed expenses are unaffected? (Negative amount should be indicated by a minus sign. Omit the “$” sign in your response.) Change in net operating income $ Guitian Corporation produces and sells a single product. The company’s contribution format income statement for June appears below: Sales (5,500 units) Variable expenses $ 165,000 Contribution margin Fixed expenses Net operating income 297,000 132,000 105,300 $ 26,700 Required: Redo the company’s contribution format income statement assuming that the company sells 5,700 units. (Omit the “$” sign in your response.) Net operating income $

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