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Net operating income

Information concerning Label Corporation's operations follow:

Variable expenses...$240,000
Fixed expenses...$40,000

Assuming that Label increased sales by 20%, what should net operating income be...choices are?

a. $20,000

b. $24,000

c. $32,000

d. $80,000

Solution Preview

The variable cost as a percentage of sales is ...

Solution Summary

The solution explains the calculation of net operating income.