Increase in revenue per month


Sutton Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $6 of variable costs to make. During April, 700 drives were sold. Fixed costs for April were $4 per unit for a total of $2,800 for the month. How much does Sutton's operating income increase for each $1,000 increase in revenue per month?

A) $700.

B) $500.

C) $14,000.

D) Not enough information to determine the answer.

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Accounting Basics: Increase in revenue per month
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