A Company Has Variable Costs That Are 3/8 the Value

question 25

Multiple Choice

A company has variable costs that are 3/8 the value of their sales revenues. Total net income for the most recent period was a profit of $123 400 and sales were $400 000. The company has started a new marketing campaign that they hope will increase sales, but it will require additional advertising of $11 200. How many sales dollars does the company have to generate in order to remain at the same level of profitability as before the new ad campaign?

• A) $358 933.33
• B) $215 360.00
• C) $400 000.00
• D) $417 920.00
• E) $696 533.33

---

Definitions:

Sample Mean

The average value of a sample set of numbers.

Freshmen

First-year students in a secondary or post-secondary educational institution.

Probability

The evaluation of how probable an event is, shown as a numerical value between 0 and 1, where 0 stands for the event being impossible and 1 representing absolute certainty of the event occurring.

Sample Mean

The sample mean is the average value of a sample set of numbers, calculated by dividing the sum of all values in the sample by the number of values.