If the variable cost per unit increases by $1, spending on advertising increases by $1,600, and unit sales increase by 220 units, what would be the net operating income?

$12,300

Explanation:

The computation of the net operating income is shown below:

Sales                           $85,400      (1,220 units × $70)

Less: Variable cost   -$48,190        (1,220 units × $39.5)

Contribution margin  $37,210

Less: Fixed expenses  -$24,910      ($23,310 + $1,600)

Net operating income $12,300

The cost per unit is

= $70,000 ÷ 1,000 units

= $70

Since the sales units is increased by 220 units, so total units increased by 1,000 units + 220 units = 1,220 units

The variable cost  per unit is

= $38,500 ÷ 1,000

= $38.5

The variable units is increased by $1 so total units increased by $38.5 + $1 = $39.5

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.