A company has provided the following data:
*
Sales
3,000 units
Sales price
$70 per unit
Variable cost
$50 per unit
Fixed cost
$25,000
If the dollar contribution margin per unit is decreased by 10%, total fixed cost is decreased by
20%, and all other factors remain the same, what will the outcome be for operating income?
Decrease by $11,000
Decrease by $1,000
Increase by $1,000
Increase by $11,000
A Company has fixed costs of $500,000
and a contribution margin ratio of 40%.
Currently, margin of safety is $1,500,000.
What are the company's current sales? *
$350,000
$3,500,000
$3,000,000
$2,750,000