Holger Incorporated, which produces and sells a single product, has provided the following
data:
|
Sales |
2,000 units |
|
Selling price |
$60 per unit |
|
Variable expense |
$40 per unit |
|
Fixed expense |
$20,000 |
Consider each of the following questions independently.
If the dollar contribution margin per unit is increased by 10% and if total fixed expense is decreased by 20%, net operating income is expected to:
A) increase by $2,000
B) increase by $12,000
C) increase by $8,000
D) increase by $16,000