The Following Income Statements Are Provided for Two Companies Operating

The following income statements are provided for two companies operating in the same industry: $\begin{array}{|l|c|c|}\hline&\text { Felix Company}& \text {Jinx Company }\\\hline\text { Reverule } & \$ 200,000 & \$ 200,000 \\\hline \text { Variable costs } & (25,000) & (70,000) \\\hline \text { Contribution margin } & 175,000 & 130,000 \\\hline \text { Fixed costs } & (70,000) & (25,000) \\\hline \text { Net income } & \$ 105,000 & \$ 105,000\\\hline\end{array}$

Assuming sales increase by $1,000, select the correct statement from the following:

A) Felix's net income will be more than Jinx's.
B) Only Felix will experience an increase in profit.
C) Felix's net income will increase by $250.
D) Jinx's net income will increase by 6%.

Correct Answer:

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