The Following Income Statements Are Provided for Two Companies Operating

question 180

Multiple Choice

The following income statements are provided for two companies operating in the same industry $\begin{array} { l }& \text {Felix Company }& \text { Jinx Company} \\ \text { Revenue}&\$200,000&\$200,000\\ \text { Variable costs}&(25,000) &(70,000) \\ \text {Contribution margin }&175,000&130,000\\ \text {Fixed costs }&(70,000) &(25,000) \\ \text {Net income }&\$105,000&\$105,000\end{array}$
Assuming sales increase by $1,000, select the correct statement from the following:

• A) Felix's net income will be more than Jinx's.
• B) Both companies will experience an increase in profit.
• C) Felix's net income will increase by $250.
• D) Jinx's net income will increase by 6%.

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