Answer:
Effect on income= $12,038 increase
Explanation:
Giving the following information:
Variable costs as a percentage of sales for Lemon Inc. are 74%
How much will operating income change if sales increase by $46,300.
To calculate the effect on income, we need to calculate the increase in total contribution margin:
Total contribution margin change= 46,300*(1-0.74)
Total contribution margin change= $12,038 increase
Effect on income= $12,038 increase
