Use the Following Information to Answer the Following Questions

question 56

Multiple Choice

Use the following information to answer the following Questions
Edmonco Company produced and sold 45,000 units of a single product last year, with the following results:
-If Edmonco's sales revenues increase 15%, what will be the percentage increase in income before income taxes?

• A) 15%.
• B) 45%.
• C) 60%.
• D) 75%.
• E) None of the other answers is correct.

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Definitions:

Direct Labor

The cost of wages for workers who are directly involved in producing goods or providing services.

Overhead

Indirect costs not directly associated with the production of goods or services, such as administrative expenses and rent.

Variable Production Costs

Variable production costs are expenses that vary directly with the level of production, such as raw materials and direct labor costs.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance expenses.