Geno's Body Shop had sales revenues and operating costs in 2016 of $650,000 and $525,000,...

Question:

Geno's Body Shop had sales revenues and operating costs in 2016 of $650,000 and $525,000, respectively. In 2017, Geno's plans to expand the services it provides to customers to include detailing services. Revenues are expected to increase by $85,000 and operating costs by $50,000 as a result of this expansion.

Assuming that there are no changes to the existing body shop business, by how much would operating profits be expected to increase during 2017?

Operating Profit:

Operating profit is the residual after deducting operating expenses from operating income. Operating profit is before interest and tax.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

Operating profit : Operating income - Operating expenses

For 2016

=$650 000- $525 000

=$125 000

For 2017

=($650 000+$85 000)-($525...

See full answer below.


Learn more about this topic:

Loading...
Net Profit: Definition & Calculation

from

Chapter 1 / Lesson 24
6.5K

Explore net profit. Learn the definition of net profit and understand the difference between gross profit and net profit. See net profit formula with examples.


Related to this Question

Explore our homework questions and answers library