Assume the following amounts: Total fixed costs Selling price per unit Variable costs per unit If sales revenue per unit increases to and units are sold, what is the operating income?

The correct option is c. 129,000.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Assume the following amounts:

Total fixed costs. $15,000

selling price per unit. $19

variable costs per unit. $12

if sales revenue per unit increases to $21 and 16,000 units are sold what is the operating income?

a 159,000

b. 336,000

c. 129,000

d. 144,000

The explanation to the answer is now provided as follows:

Since sales revenue per unit increases to $21, we use it as the selling price and proceed as follows:

Computation of Operating Income

Particular                                              Amount ($)

Sales revenue (16,000 * $21)                336,000

Variable cost (16,000 * $12)                  (195,000)  

Contribution                                            144,000

Fixed cost                                               (15,000)  

Operating income                                 129,000    

Therefore, the correct option is c. 129,000. That is, operatin income is $129,000.

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