Please help with the following problem.
Use the following to answer questions 42-43:
The following is Addison Corporation's contribution format income statement for last month:
Less variable expenses 700,000
Contribution margin 300,000
Less fixed expenses 180,000
Net income $ 120,000
The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month.
42. If sales increase by 100 units, by how much should net income increase?
A) $ 400 C) $1,500
B) $4,800 D) $2,500
43. How many units would the company have to sell to attain target profits of $150,000?
A) 22,000 C) 25,000
B) 37,500 D) 26,667
42. Net income will increase by contribution of 100 units.
Contribution per unit is 300000/20000= ...
This explains the computation of units to earn desired profit and net income. Step by step calculations are given for each.