Help on question 17-19

A company has an operating leverage of 7.3. If the company's sales ncrease by 3%, its net operating come should increase by about A) 243 3% B) 7.3% C)219% D) 3.0% 18. A corporation produces and sells a single product. Data concerning that product appear below: Percent of Sales 100% 30% 70% Per Unit $220 Selling price Variable expenses Contribution margin $154 Fixed expenses are $991,000 per month. The company is currently selling 8,000 units per month. The marketing manager has proposed a commission of $11 per unit, in exchange for a decrease in sales salaries of a total of $74,000 per month. The marketing manager predicts that this would increase monthly sales by 200 units. Is this a good decision? Why or why not? Support your answer by showing the computation of the overall effect of this change on the company's monthly net operating income. Good decision-Yes or No (circle one Why or why not? Old New Net Operating Income 19. Net operating income computed under variable costing would exceed net operating income computed using absorption costing if A) units sold exceed units produced B) units sold are less than units produced C) units sold equal units produced D) the average fixed cost per unit is zero