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
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View this answerOperating profit : Operating income - Operating expenses
For 2016
=$650 000- $525 000
=$125 000
For 2017
=($650 000+$85 000)-($525...
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