A company that manufactures monitors has fixed costs of $83,500 per annum. The variable costs are 33%
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Question:
A company that manufactures monitors has fixed costs of $83,500 per annum. The variable costs are 33% of sales and the profit is $62,000. When the selling price was reduced by 10%, the sales volume increased by 25%.
a. What was the original sales revenue?
b. What were the original variable costs?
c. What is the new sales revenue?
d. What are the new variable costs?
e. What is the amount of change in net income?
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