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Hello,I have the following question.  Shown here is an income statement in the traditional format for a firm with a sales volume of 15,500 units.Revenues $170,500Cost of Goods sold ($10,000 + $2.75/unit) 52,625Gross Profit $117,875Operating expenses   Selling ($2,450 + $1.15/unit)20,275 Administration ($5,000 + $0.45/unit)11,975Operating Income $85,625Question D1: Calculate the firm's operating income (or loss) if the selling unit price and variable expense per unit do not change and the total revenues increase by $13,000.  Do not round intermediate calculations. Question D2: Calculate the firm's operating income (or loss) if the selling unit price and variable expense per unit do not change and the total revenues decrease by $10,000.  Do not round intermediate calculations.

Question

Hello,

I have the following question.  

Shown here is an income statement in the traditional format for a firm with a sales volume of 15,500 units.

Revenues   $170,500
Cost of Goods sold ($10,000 + $2.75/unit)   52,625
Gross Profit  

$117,875

Operating expenses    
  Selling ($2,450 + $1.15/unit) 20,275
  Administration ($5,000 + $0.45/unit) 11,975
Operating Income   $85,625

Question D1: Calculate the firm's operating income (or loss) if the selling unit price and variable expense per unit do not change and the total revenues increase by $13,000.  Do not round intermediate calculations.

 

Question D2: Calculate the firm's operating income (or loss) if the selling unit price and variable expense per unit do not change and the total revenues decrease by $10,000.  Do not round intermediate calculations.

check_circleAnswer
Step 1

Calculate total variable expense per unit, total fixed costs, and selling price per unit

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Step 2

D1. Determine the firm\\'s operating income, if total revenue increases by $13,000.

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Step 3

D2. Determine the firm\'s operating income, i...

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