The following budgeted income statement was prepared by Fullton Corporation:
|
Sales (100 units at $100 a unit) |
|
$10,000 |
|
Cost of goods sold: |
|
|
|
Direct labor (variable) |
$1,500 |
|
|
Direct materials |
1,400 |
|
|
Variable factory overhead |
1,000 |
|
|
Fixed factory overhead |
500 |
4,400 |
|
Gross margin |
|
5,600 |
|
Selling expenses: |
|
|
|
Variable |
600 |
|
|
Fixed |
1,000 |
|
|
Administrative expenses: |
|
|
|
Variable |
500 |
|
|
Fixed |
1,000 |
3,100 |
|
Net operating income |
|
$ 2,500 |
What would the net operating income be if sales increase by 25%?
A) $3,125
B) $3,750
C) $4,000
D) $5,000