Company B’s income statement for this year is shown below. Assume that the company’s sales will increase by 10% but fixed expenses remain the same next year. By what percentage will net operating income increase? Sales $100 Variable expenses 30 Contribution Margin 70 Fixed expenses 35 Net operating income $35 a)20% b)10% c)40% d)30%
Company B’s income statement for this year is shown below. Assume that the company’s sales will increase by 10% but fixed expenses remain the same next year. By what percentage will net operating income increase? Sales $100 Variable expenses 30 Contribution Margin 70 Fixed expenses 35 Net operating income $35 a)20% b)10% c)40% d)30%
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 3DQ
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Company B’s income statement for this year is shown below. Assume that the company’s sales will increase by 10% but fixed expenses remain the same next year. By what percentage will net operating income increase?
Sales |
$100 |
Variable expenses |
30 |
Contribution Margin |
70 |
Fixed expenses |
35 |
Net operating income |
$35 |
a)20%
b)10%
c)40%
d)30%
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