Reference: 08-14
Wright Corporation's Contribution Format Income Statement for Last

Reference: 08-14
Wright Corporation's contribution format income statement for last month appears below. $$\begin{array} { | l | c | } \hline \text { Sales } & \$ 45,000 \\\hline \text { Less variable expenses } & 27,000 \\\hline \text { Contribution margin } & 18,000 \\\hline \text { Less fixed expenses } & 12,000 \\\hline \text { Net income } & \$ 6,000 \\\hline\end{array}$$ There were no beginning or ending inventories. The company produced and sold 3,000 units during the month.
-If sales decrease by 500 units by next month, by how much would fixed expenses have to be reduced to maintain the current net income?

A) $2,000.
B) $7,500.
C) $3,000.
D) $6,000.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free