A tile manufacturer has supplied the following data:

-If the company increases its unit sales volume by 3% without increasing its fixed expenses,then total net operating income should be closest to:
A) $459,380
B) $453,667
C) $13,380
D) $482,660

Question

A tile manufacturer has supplied the following data:
 
-If the company increases its unit sales volume by 3% without increasing its fixed expenses,then total net operating income should be closest to:
A) $459,380 
B) $453,667 
C) $13,380 
D) $482,660

Quizplus · Accepted Answer

Unit sales = 520,000 units × 1.03 = 535,600 units
Unit selling price = $2,132,000 ÷ 520,000 units = $4.10 per unit
Variable manufacturing expense per unit = $650,000 ÷ 520,000 units = $1.25 per unit
Variable selling and administrative expense per unit = $260,000 ÷ 520,000 units = $0.50 per unit
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A Tile Manufacturer Has Supplied the Following Data