Use the following information to answer the questions below. Company 1 Company 2 Sales $50,000 $50,000 Variable Costs 10,000 5,000 Contribution Margin 40,000 45,000 Fixed Costs 30,000 40,000 Operating Income 10,000 5,000 A. 270% 1. If Company 1's sales increase by 30%, its operating income will increase by what percent? B. 150% 2. If Company 2's sales increase by 30%, its operating income will increase by what percent? C. 120%

Use the following information to answer the questions below. Company 1 Company 2 Sales $50,000 $50,000 Variable Costs 10,000 5,000 Contribution Margin 40,000 45,000 Fixed Costs 30,000 40,000 Operating Income 10,000 5,000 A. 270% 1. If Company 1's sales increase by 30%, its operating income will increase by what percent? B. 150% 2. If Company 2's sales increase by 30%, its operating income will increase by what percent? C. 120%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 13EA: Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are...

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