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XYZ Inc. has provided to you an income statement using the contribution format. Sales (1,000 units)       ...

XYZ Inc. has provided to you an income statement using the contribution format.

Sales (1,000 units)              $    400,000
Variable Expenses                     300,000
Contribution Margin               100,000
Fixed Expenses                          70,000
Net Operating Income        $         30,000

(The activity is within the relevant range).

If advertising spending increases by $20,000, the variable cost per unit increases by $10, and unit sales increase by 50 units, the net operating income would be closest to:

A.$4,500

B.$21,500

C.$9,450

D. $10,000

Flank Inc. has provided to you an income statement using the contribution format.

Sales (4,000 units)              $    240,000
Variable Expenses                     156,000
Contribution Margin                  84,000
Fixed Expenses                          81,900
Net Operating Income        $            2,100

(The activity is within the relevant range).

What is the break-even point expressed in dollar sales?

a.$0

B.$237,900

C.$234,000

D. $156,000

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