Final answer:
To calculate the estimated change in the company’s net operating income, we need to determine the contribution margin per unit. Given the increase in sales volume of 400 units and the total sales increase of $1,600, the estimated change in the company’s net operating income would be $1,600.
Step-by-step explanation:
To calculate the estimated change in the company’s net operating income, we need to determine the contribution margin per unit. The contribution margin is the difference between the selling price and the variable cost per unit. Given the increase in sales volume of 400 units and the total sales increase of $1,600, we can calculate the change in net operating income as follows:
Change in Net Operating Income = Contribution Margin per Unit x Change in Sales Volume
Change in Sales Volume = 400 units
Contribution Margin per Unit = $1,600 / 400 = $4
Therefore, the estimated change in the company’s net operating income would be $4 x 400 = $1,600.