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Prince Paper has budgeted the following amounts for its next fiscal​ year: Total fixed expenses $ 600 comma 000 Selling price per unit $ 70 Variable expenses per unit $ 45 If Price Paper spends an additional $ 12 comma 300 on​ advertising, sales volume should increase by 3 comma 000 units. What effect will this have on operating​ income?

Respuesta :

Answer:

Operating​ income will increase by $63,000  

Explanation:

Given:

Sales volume increase = 3,000 units

Particular                                        Amount

Increase in Sales                         $210,000      ($70×3000)  

Less: Increase in Variable cost $135,000       ($45×3000)

Less: Increase additional Costs $12,000

Chane in Net operating​ Income $63,000  

Operating​ income will increase by $63,000  

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