Atile manufacturer had the following financial data: boxes of tile produced and sold 240,000 sales revenue $1,280,000 variable manufacturing cost $456,000 fixed manufacturing cost $320,000 variable selling, general and administrative expense $156,000 fixed selling, general and administrative expense $96,000 net operating income $100,000 if the company increases its unit sales volume by 3% without increasing its fixed expenses, then total net operating income should be closest to:

If the company increases its UNIT sales volume by 3% without increasing its fixed expenses, then total net operating income should be closest to $272,040

Explanation:

There should be a mis-statement of net operating income in this question

Current net operating income= Revenue $1,280,000  - Variable Manufacturing cost $456,000  - Fixed manufacturing cost $320,000 - Variable selling, general and administrative expense $156,000  - Fixed selling, general and administrative expense $96,000 = $252,000

If the company increases its UNIT sales volume by 3% without increasing its fixed expenses, the next operating income = 1.03 x (Revenue $1,280,000  - Variable Manufacturing cost $456,000  - Variable selling, general and administrative expense $156,000)  - Fixed manufacturing cost $320,000 - Fixed selling, general and administrative expense $96,000 =  $272,040

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

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