Reference no: EM133068481
Question - Muzzillo Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
Sales (3,000 units) $180,000
Variable expenses 126,000
Contribution margin 54,000
Fixed expenses 52,200
Net operating income $1,800
Required -
a. If the selling price increases by $4 per unit and the sales volume decreases by 300 units, what would be the estimated net operating income?
b. If the variable cost per unit increases by $6, spending on advertising increases by $3,000, and unit sales increase by 1,800 units, what would be the estimated net operating income?