Answer the Following Questions Using the Information Below

question 86

Multiple Choice

Answer the following questions using the information below:
Kelly's Armoured Suits sells a single product.10 000 units were sold resulting in $100 000 of sales revenue,$40 000 of variable costs,and $12 000 of fixed costs.
-If sales increase by $25 000,operating profit will increase by:

• A)$10 000.
• B)$15 000.
• C)$22 200.
• D)None of these answers are correct.

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Definitions:

Owner's Equity

Owner's Equity is the total assets of an entity minus its total liabilities, representing the ownership interest in the company.

Income Statement

A financial report summarizing revenue, expenses, and profits over a given period, highlighting a company’s financial performance.

Balance Sheet

A financial statement that shows the assets, liabilities, and owner’s equity of an entity at a specific point in time, reflecting the financial position.

Total Liabilities

The sum of all financial obligations or debts a company owes to external parties.