Reference no: EM132637441

Question - Assume that variable costs increase to 45% of the current sales price and fixed costs increase by $13,000 per month. If Oriole were to raise its sales price 10% to cover these new costs, but the number of blankets sold were to drop by 6%, what would be the new annual operating income?

Oriole Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 3,700 schools. Oriole's variable costs are 42% of sales; fixed costs are $116,000 per month.