Industrial Chemicals Corporation has sales revenue of $2.45 million, variable expenses of $284,000, and fixed expenses of $356,000. If the company’s sales volume increases by 15%, how will this change its operating income?
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Ответ:
Increase in income= $324,900
Explanation:
Giving the following information:
Industrial Chemicals Corporation has sales revenue of $2.45 million, variable expenses of $284,000
Increase in volume= 15%
First, we need to calculate the total current contribution margin:
Total contribution margin= 2,450,000 - 284,000= $2,166,000
Income will increase in the same amount as contribution margin:
New contribution margin= 2,166,000*1.15= $2,490,900
Increase in income= 2,490,900 - 2,166,000= $324,900
Ответ: