Reference: 08-01
the Following Is Addison Corporation's Contribution Format Income

question 122

Multiple Choice

Reference: 08-01
The following is Addison Corporation's contribution format income statement for last month: $$\begin{array} { | l | c | } \hline \text { Sales } & \$ 1,000,000 \\\hline \text { Less variable expenses } & 700,000 \\\hline \text { Contribution margin } & 300,000 \\\hline \text { Less fixed expenses } & 180,000 \\\hline \text { Net income } & \$ 120,000 \\\hline\end{array}$$ The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month.
-If sales increase by 100 units, by how much should net income increase

• A)$2,500.
• B)$1,500.
• C)$4,800.
• D)$400.

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Definitions:

Monopolists

Entities or firms that have exclusive control over the market for a particular good or service, thereby eliminating competition.

Consumers

Individuals or organizations that use economic goods and services for their own personal benefit or to meet their needs.

Net Loss

The amount by which total expenses exceed total revenues in a specific period, indicating a negative financial performance.