·. A-1 | : . | . . 1 Normal! 1 No Spac Heading 1 Heading 2 Paragraph Styles 25.

Question

·. A-1 | : . | . . 1 Normal! 1 No Spac Heading 1 Heading 2 Paragraph Styles 25. Nocum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) Variable expenses Contribution margin Fixed expenses Net operating income 120,000 90,000 30,000 21,000 9.000 S If sales decline to 2,900 units, the net operating income would be closest to A) $29,000 B) S1,000 C) $8,700 D) $8,000 (Ctrl) IF 0.-e-m e @ -9.-1

Explanation / Answer

Calculate net operating income on 2900 units :

so answer is d) $8000

Sales (2900*40) 116000 Variable cost (2900*30) (87000) Contribution margin 29000 Fixed cost (21000) Net operating income 8000

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