Dunbar Manufacturing's Variable Costs Are 30% of Sales

question 9

Multiple Choice

Dunbar Manufacturing's variable costs are 30% of sales.The company is contemplating an advertising campaign that will cost $44,000.If sales are expected to increase $80,000, by how much will the company's net income increase?

• A)$36,000
• B)$56,000
• C)$24,000
• D)$12,000

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Definitions:

Federal Depository Bank

A financial institution that is authorized to hold deposits for the Federal Reserve System and process related transactions.

Payroll Taxes

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, including social security and Medicare taxes in the United States.

Contingent Liabilities

Potential financial obligations that may occur depending on the outcome of a future event.

Future Event

A prospective occurrence or situation that has yet to happen, often considered in planning and strategy contexts.