What would be the estimated net operating income

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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?

Reference no: EM133068481

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