Question

Bonita Industries produces flash drives for computers, which it sells for $30 each. Each flash drive costs $6 of variable costs to make. During April, 1000 drives were sold. Fixed costs for April were $6000. How much does Bonita’s operating income increase for each $2400 increase in revenue per month?

Answer 1

See below

Step-by-step explanation:

Sales ($30 × 1,000 drives sold)

$30,000

Less:

Variable cost ($6 × 1,000 drives sold)

($6,000)

Contribution margin

$24,000

Less:

Fixed costs

($6,000)

Operating profit

$18,000

Therefore, Bonita's operating income increases by $18,000 per month