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Knowledge Check $01$

Lindner Company currently sells $1,000$ units of its product, which generate sales revenue of $$190,000,$ variable costs of $$76,000,$ and fixed expenses of $$96,000.$ Management believes an increase in advertising expense of $$20,000$ will increase the company$$s sales by $300$ units. How will this change affect the company$$s net operating income?

multiple choice $1$

Net operating income will decrease by $$20,000$

Net operating income will increase by $$20,000$

Net operating income will increase by $$14,200$

Net operating income will decrease by $$12,000$

Knowledge Check $02$

Lindner Company has current sales of $1,000$ units, at a selling price of $$190$ per unit, variable costs per unit of $$76,$ and fixed expenses of $$96,000.$ The company believes sales will increase by $300$ units, if the company introduces sales commissions as an incentive for the sales staff. The change will decrease the selling price to $$175$ per unit, increase variable cost per unit to $$100,$ and decrease fixed expenses by $$20,000.$ What is the net operating income after the changes?

multiple choice $2$

$$21,500$

$$24,500$

$$22,000$

$$30,000$

Knowledge Check $03$

Middletown Corporation is currently selling $104$ units of its product. Management is in the process of determining the price that it should charge for a bulk order of $40$ units of this product. This order will not involve any additional fixed costs and the company's current sales will not be affected. The variable cost per unit is $$200.$ The company targets a profit of $$4,000$ on the bulk order. What selling price per unit should the company quote for the bulk order? $($Round your answer to the nearest whole dollar.$)$

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