Assume Mussa Company Has the Following Information Available If Fixed Costs Increase by $200,000,what Is the Expected Operating

question 114

Multiple Choice

Assume Mussa Company has the following information available:
$\begin{array} { l } \text {Selling price per unit }&\$100\\ \text {Variable cost per unit }&\$45\\ \text { Fixed costs per year}&\$420,000\\ \text {Expected sales per year (units) }&20,000\\\end{array}$

If fixed costs increase by $200,000,what is the expected operating income?

• A) $280,000
• B) $480,000
• C) $680,000
• D) $1,380,000

---

Definitions:

Nameplate Rating

The official specifications provided by manufacturers that detail the operating conditions and capabilities of an equipment.

Full-load Horsepower

The amount of power generated by an engine or motor when operating at its maximum permissible load.

Three-phase Induction Motors

These motors operate on three-phase AC power and are widely used in industrial applications due to their robustness, efficiency, and reliability.

Physical Connection

The tangible linking of two or more objects, components, or systems, allowing for the transfer of electricity, signals, or mechanical force.