CORRECT ANSWER B. IF RAYMUND INSTALLS THE AUTOMATED PROCESS, TH...
261.
Correct answer b. If Raymund installs the automated process, the monthly operating income
would be $10,000 as shown below.
Reduction in variable costs: ($50,000 ÷ 5,000) = $10 - $5 = $5
Sales
$100,000
Variable manufacturing
25,000
($5 x 5,000)
Variable selling
15,000
Contribution
60,000
Fixed manufacturing
46,000
Fixed selling
4,000
Operating income
$ 10,000