Figure 8-7
the Income Statement for Thomas Manufacturing Company for 2011

question 27

Multiple Choice

Figure 8-7
The income statement for Thomas Manufacturing Company for 2011 is as follows: $\begin{array}{lr}\text { Sales }(10,000 \text { units) } & £ 120,000 \\\text { Variable expenses } & 72,000 \\\text { Contribution margin } & £ 48,000 \\\text { Fixed expenses } &{36,000}\\\text { Operating income } & £ 12,000\end{array}$
-Refer to Figure 8-7. If sales increase by £60,000, what will happen to profit?

• A)increase by £60,000
• B)increase by £24,000
• C)increase by £6,000
• D)increase by £36,000

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Definitions:

Homeostasis

The body's automatic process to maintain a stable internal environment in response to external changes.

Optimal Level

The most favorable or efficient level or state for a certain function or condition to occur.

Self-determination

refers to the process by which a person controls their own life, making choices and decisions based on their preferences and interests without undue influence from others.

Incentive

A factor, often a reward or punishment, that motivates an individual to perform an action or behave in a specific manner.