Total Per Unit Sales Variable expenses Bear is expecting a 20-cent increase in v

Question

Total

Per Unit

Sales

Variable expenses

Bear is expecting a 20-cent increase in variable expenses. No other changes are expected or planned. How much contribution margin should Bear expect after the increase?

12. Bear Publishing sells a nature guide. The following information was reported for a typical month (sales volume is constant each month):

Total

Per Unit

Sales

$17,600 $16.00

Variable expenses

$9,680 $8.80 Contribution margin $7,920 $7.20 Fixed expenses $3,600 Net operating income $4,320

Bear is expecting a 20-cent increase in variable expenses. No other changes are expected or planned. How much contribution margin should Bear expect after the increase?

     A. $7,700 B. Can't be determined C. $9,900 D. $4,100

Explanation / Answer

C. $9,900

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