If the company's sales volume increases by 30% next year, all other factors remaining the same, its net income will increase by:

A) $37,800.
B) $72,000.
C) $50,400.
D) $92,400.

Question

If the company's sales volume increases by 30% next year, all other factors remaining the same, its net income will increase by:A) $37,800.B) $72,000.C) $50,400.D) $92,400.

Elnura Tashbekova · Accepted Answer

Final Answer : C, Explanation :  The net income increase can be calculated by finding the contribution margin per unit (sales price - variable cost), then multiplying by the increase in units sold (30% of 4,000 units = 1,200 units). The contribution margin per unit is $60 - $18 = $42. So, the increase in net income is 1,200 units * $42 = $50,400. Fixed costs do not change with sales volume, so they don't affect the calculation of the increase in net income.

If the company's sales volume increases by 30% next year, all other factors remaining the same, its net income will increase by:

A) $37,800.
B) $72,000.
C) $50,400.
D) $92,400.

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