A Company Has Variable Costs That Are 1/8 the Value

question 32

Multiple Choice

A company has variable costs that are 1/8 the value of their sales revenues. Total net income for the most recent period was a profit of $50 400 and sales were $500 000. The company has started a new marketing campaign that they hope will increase sales, but it will require additional advertising of $15 000. 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) $517 142.86
• B) $387 100.00
• C) 392 100.00
• D) $387 100.86
• E) 392 100.86

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Definitions:

Speciation

The evolutionary process by which new biological species arise.

Isolating Mechanisms

Biological features or behaviors that prevent species from interbreeding, thus maintaining species boundaries and genetic integrity.

Prezygotic

Referring to mechanisms that prevent fertilization or mating between species, such as geographical separation or timing differences in mating.

Postzygotic

Referring to events that occur after the formation of a zygote, affecting hybrid viability or fertility.