Question:
O'Brien, Inc.'s, 2010 contribution margin income statement shows the following:
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Sales @ $8 per unit
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$ 160,000
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Less: Variable expense
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(128,000)
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Contribution margin
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$ 32,000
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Less: Fixed expenses
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(44,000)
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Operating income (loss)
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$ (12,000)
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What would O'Brien, Inc.'s, operating income (or loss) be if fixed costs were increased by 10 percent and sales volume increased by 30 percent?
a. $1,290.
b. $2,650.
c. $(6,800).
d. $(9,680).
e. None of the above.