Misa Corporation manufactures circuit boards and is in the process of preparing next year's budget.The pro forma income statement for the current year is presented below. For the coming year,the management of Misa Corporation anticipates a 5 percent decrease in sales,a 10 percent increase in all variable costs,and a $45,000 increase in fixed expenses.
The operating profit for next year would be
A)$477,500.
B)$492,500.
C)$552,500.
D)$831,250.

Question

Quizplus · Accepted Answer

To calculate the operating profit for next year, adjust the current year's sales by a 5% decrease, increase variable costs by 10%, and add $45,000 to fixed expenses. Then, subtract the adjusted total costs from the adjusted sales to find the operating profit.

Misa Corporation Manufactures Circuit Boards and Is in the Process