Reference: 08-01
the Following Is Addison Corporation's Contribution Format Income

Reference: 08-01
The following is Addison Corporation's contribution format income statement for last month: $$\begin{array} { | l | c | } \hline \text { Sales } & \$ 1,000,000 \\\hline \text { Less variable expenses } & 700,000 \\\hline \text { Contribution margin } & 300,000 \\\hline \text { Less fixed expenses } & 180,000 \\\hline \text { Net income } & \$ 120,000 \\\hline\end{array}$$ The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month.
-If sales increase by 100 units, by how much should net income increase

A) $2,500.
B) $1,500.
C) $4,800.
D) $400.

Correct Answer:

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