carry- all plans to sell 1300 carriers next year and has budgeted sales of 46000

Question

carry- all plans to sell 1300 carriers next year and has budgeted sales of 46000 and profits of 22000. variable cost are projected to be $20 per unit. micheal company offers to pay $20600 to buy 590 units from carry-all. total fixed cost are 7000 per year. this offer does not affect carry-alls other planned operations. the incremental revenue for this situation are ? 2. steller company has the following sales variable cost and fixed cost. if sales increase by 10000 then the profit increase of decrease by how much? sales 50000, variable cost 8500, fixed cost 26000

Explanation / Answer

Answer:1 Incremental revenue = 20600 - (46000/1300)(590) = -$277

Answer: 2

Contribution Margin = (50000-8500)/50000 = 83%

Increase in Profit by $10000 increase in Sales = 10000 x 83% = $8300.

if sales increase by 10000 then the profit increase by $8300.

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