A cement manufacturer has supplied the following data: Tons of cement produced and sold 220000 Sales...

A cement manufacturer has supplied the following data:

	Tons of cement produced and sold	220000
	Sales revenue	$924000
	Variable manufacturing expense	$297000
	Fixed manufacturing expense	$285498
	Variable selling and administrative expense	$165000
	Fixed selling and administrative expense	$81917

If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would operating income be closest to

Expert Solution

Sales revenue, Variable manufacturing expense and Variable selling and administrative expense

are variable expenses and so they will vary with increase or decrease in quantity

Fixed manufacturing expense and fixed selling and administrative expense are fixed expenses and will not vary with a small change in quantity

The following table shows per unit sale and variable expenses

The following table shows the operating Income

ekkarill92 answered 2 years ago

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