(Cost and revenue behavior) The following financial data have been deter mined from analyzing the records of Tim’s Brake Co. (a one product firm):
|
Contribution margin per unit |
$ 50 |
|
Variable cost per unit |
42 |
|
Annual fixed cost |
$180,000 |
How does each of the following measures change when product volume goes up by one unit at Tim’s Brake Co?
a. Total revenue
b. Total cost
c. Income before tax