Question

Suppose Mandela can add some workers and reduce Fixed Costs to 40,000 but Variable Cost Per Unit will increase to40. What is the new projected Operating Income?

Answer 1

The new projected operating income can be calculated by subtracting the new fixed costs and the new variable costs from the revenues.

Step-by-step explanation:

The new projected operating income can be calculated by subtracting the new fixed costs and the new variable costs from the revenues.

Given that the original fixed costs were $15,000, the new fixed costs are $40,000.

The original variable cost per unit was $15,000, and the new variable cost per unit is $40.

So, the new projected operating income is $20,000 - ($40,000 + $40 * X), where X is the number of units produced.

By simplifying the expression, we can calculate the new projected operating income.