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Let's say sales are currently $20 per unit, fixed costs are $3 per unit and...

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Accounting

Let's say sales are currently $20 per unit, fixed costs are $3 per unit and variable costs are $7 per unit. Let's assume current product volume is 150,000 units:

Currently, we have:

Sales, $20 per unit x 150,000 units = $3,000,000 Variable costs $7 per unit x 150,000 = $1,050,000 Contribution margin = $1,950,000 Fixed costs = 150,000 units x $3 unit = $450,000 Operating Income = $1,500,000 Operating Income Percentage 50%

What happens when our sales volume increases by 1 percent? Show your work

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