Answer:
B. $ 117 comma 000
Explanation:
Selling price per unit $ 19 *14, 000= $ 266000
Variable costs per unit $ 12 *14, 000= $ 168,000
Contribution Margin $ 98,000
Less Total fixed costs $ 23, 000
Operating Income $ 75,000
If sales revenue per unit increases to $ 22
Selling price per unit $ 22 *14, 000= $ 308000
Variable costs per unit $ 12 *14, 000= $ 168,000
Contribution Margin $ 140,000
Less Total fixed costs $ 23, 000
Operating Income $ 117,000
Answer:
B. $ 117 comma 000
Explanation:
The Net/operating income is the difference between the total sales and total costs, Total cost is made up of the fixed and variable cost.
Like the total sales, the total variable cost is also affected by the level of activities or units produced/sold.
Mathematically,
Net income = Total sales - variable cost - fixed cost
= $22(14,000) - $12(14,000) - $23,000
= $117,000
