The change in the company's net operating income if it were to increase its total sales by 1,000 is $400.
Given:
units sold = 50000 units
total sales = $200000
Total variable expense = $120000
Fixed expense = $65000
Net operating income is defined as the assessment or process of analyzing the profitability of an income-generating business or firm.
Net operating income is calculated as the difference between property revenue and operating expenses.
Change in net operating income can be calculated by using the below-mentioned formula:
change in net operating income = change in sales × contribution margin ratio (refer to the attached image)
Substituting the values in the above formula we get,'
change in net operating income = $1000 × 40%
= $400
Hence, The change in the company's net operating income, if it were to increase its total sales by 1,000, is $400.
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