Question: BRIEF EXERCISE 3-5 Cost Behaviour and Contribution Margin CC 3.6 Saxan Ltd. had the following results for the year: . .. Sales ............. ..... Less:

BRIEF EXERCISE 3-5 Cost Behaviour and Contribution Margin CC 3.6 Saxan

BRIEF EXERCISE 3-5 Cost Behaviour and Contribution Margin CC 3.6 Saxan Ltd. had the following results for the year: . .. Sales ............. ..... Less: Variable costs... .. Contribution margin ........... Less: Fixed costs..... ... Net operating income $45,000 27,000 18.000 12.000 .. $ 6,000 The average selling price for the units sold was $15 per unit. Required: If sales decrease by 500 units, by how much will fixed expenses have to be reduced to maintain the current net operating income of $6,000? (Adapted CGA-Canada)

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