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Data for Capitol Suppliers are shown below: Total Sales (1,500 units) $750,000 Less Variable Costs $525,000 Contribution Margin $225,000 Less Fixed Costs $200,000 Net Operating Income $ 25,000 The company sells Whiteboard sets to Government and Private schools. Management is considering removing the monthly salaries of its Sales staff, thereby reducing Fixed expenses by 10% per month. The company will pay a sales commission instead to its Sales staff which will increase variable cost per unit by $20. Which one of the following would be the net operating income if the changes were made? Select one:  • A. $5,000 • B. $15,000 • C. $45,000 D. $20,000

Data for Capitol Suppliers are shown below: Total Sales (1,500 units) $750,000 Less Variable Costs $525,000 Contribution Margin $225,000 Less Fixed Costs $200,000 Net Operating Income $ 25,000 The company sells Whiteboard sets to Government and Private schools. Management is considering removing the monthly salaries of its Sales staff, thereby reducing Fixed expenses by 10% per month. The company will pay a sales commission instead to its Sales staff which will increase variable cost per unit by $20. Which one of the following would be the net operating income if the changes were made? Select one:  • A. $5,000 • B. $15,000 • C. $45,000 D. $20,000

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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Data for Capitol Suppliers are shown below: Total Sales (1,500 units) $750,000 Less Variable Costs $525,000 Contribution Margin $225,000 Less Fixed Costs $200,000 Net Operating Income $ 25,000 The company sells Whiteboard sets to Government and Private schools. Management is considering removing the monthly salaries of its Sales staff, thereby reducing Fixed expenses by 10% per month. The company will pay a sales commission instead to its Sales staff which will increase variable cost per unit by $20. Which one of the following would be the net operating income if the changes were made?

Select one: 

• A. $5,000

• B. $15,000

• C. $45,000

D. $20,000

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