Variable costs as a percentage of sales for Lemon Inc. are 79%, current sales are $653,000, and fixed costs are $195,000. How much will operating income change if sales increase by $43,800? a.$34,602 increase b.$9,198 increase c.$34,602 decrease d.$9,198 decrease

Variable costs as a percentage of sales for Lemon Inc. are 79%, current sales are $653,000, and fixed costs are $195,000. How much will operating income change if sales increase by $43,800? a.$34,602 increase b.$9,198 increase c.$34,602 decrease d.$9,198 decrease

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 14EB: Company A has current sales of $4,000,000 and a 45% contribution margin. Its fixed costs are...

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Question

Variable costs as a percentage of sales for Lemon Inc. are 79%, current sales are $653,000, and fixed costs are $195,000. How much will operating income change if sales increase by $43,800?

a.$34,602 increase

b.$9,198 increase

c.$34,602 decrease

d.$9,198 decrease

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