When Bumper Inc sells a bumper car, the contribution margin is $510 per car. The company...

Transcribed Image Text:

When Bumper Inc sells a bumper car, the contribution margin is $510 per car. The company is thinking about increasing fixed costs due to expanding production by $980,000 next year as well as reducing the selling price per car by $25. Currently the company sells 21,000 bumper cars a year. How will operating income be affected by this proposed change for next year if the company plans to sell 26,000 bumper cars in the coming year? O A. Increase by $920,000 O B. Decrease by $855,000 O C. Decrease by $980,000 O D. Cannot be determined with the information given When Bumper Inc sells a bumper car, the contribution margin is $510 per car. The company is thinking about increasing fixed costs due to expanding production by $980,000 next year as well as reducing the selling price per car by $25. Currently the company sells 21,000 bumper cars a year. How will operating income be affected by this proposed change for next year if the company plans to sell 26,000 bumper cars in the coming year? O A. Increase by $920,000 O B. Decrease by $855,000 O C. Decrease by $980,000 O D. Cannot be determined with the information given

Answer rating: 100% (QA)

Increase in Contribution margin ... View the full answer