How would that affect its operating income

Assignment Help Financial Accounting

Reference no: EM13865073

Jarvis Foods produces a gourmet condiment which sells for $10.00 per unit. Variable costs are $7.50 per unit, and fixed costs are $18,000 per month. Jarvis is currently selling 8,000 units per month. If Jarvis reduces the selling price down to $9.00 per unit, they believe volume will rise to 13,000 units per month. How would that affect its operating income? Operating income will go up by $6,000. Operating income will go down by $1,600. Operating income will go down by $500. Operating income will go up by $2,000.

Reference no: EM13865073

Questions Cloud

Advantages and disadvantages of debt swapping as a means : What are the advantages and disadvantages of debt swapping as a means of reducing the debts of developing countries?

What are the days sales collected : If net sales total $50,000, beginning accounts receivable was $10,000, and ending accounts receivable is 16,000, what are the days’ sales collected?

Describe the possible issues with multi-employer worksite : Describe the possible issues with Multi-Employer Worksite Policy. How will OSHA assess the citations? Big Dog Construction and Specialty Chemicals would be subject to what, if any, citations? Why?

Present value of cash flow allows an individual to asses : Toy produces a product that requires 10 standard labor hours at 5 /HR. iF Toy produces 1,000 units and uses 10,000 direct labor hours, the labor efficiency variance is. The present value of cash flow allows an individual to assess

How would that affect its operating income : Jarvis Foods produces a gourmet condiment which sells for $10.00 per unit. Variable costs are $7.50 per unit, and fixed costs are $18,000 per month. Jarvis is currently selling 8,000 units per month. If Jarvis reduces the selling price down to $9.00 ..

Why is animal medicine a controversial issue : How have pet owners' attitudes toward their pets changed in recent years and which part of the pet economy appears to be the most attractive

Absorption costing and variable costing : Ending inventory value with respect to absorption costing and variable costing: If Freeza collects 80% of its credit sales in the month of the sale and 20% in the month after that sales, how much will Freeza collect in March on a $220,000 credit sale..

Calculate the odds ratio based on given data : Calculate the odds ratio based on these data. The p value for this odds ratio is 0.06. State your interpretation of this p-value. Gender was considered a potential confounder and effect measure modifier in this study. The data were stratified into m..

Compare energy cost reductions : Compare energy cost reductions based upon a gas fired boiler and a fuel oil fired boiler. Assume boiler energy input at 6.5(106) Btu/hr.

User Account

All Pages