Parkins company produces and sells a single product the, Ask an Expert

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Parkins Company produces and sells a single product. The company's income statement for the most recent month isgiven below: Sales (6,000 units at $40 per unit) $ 240,000 Less manufacturing costs: Direct materials $ 48,000 Direct labor (variable) 60,000 Variable factory overhead 12,000 Fixed factory overhead 30,000 150,000 Gross margin 90,000 Less selling and other expenses: Variable selling and other expenses 24,000 Fixed selling and other expenses 42,000 66,000 Net operating income $ 24,000

There are no beginning or ending inventories.

What would the company's monthly net operating income be if sales increased by 25% and there is no change in total fixed expenses?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9981860

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