A Calgary fiRm Currently Has Sales of $630,000 and Costs

question 27

Multiple Choice

A Calgary firm currently has sales of $630,000 and costs of $553,636. The marginal tax rate is 34%. Under the percentage of sales approach, what is the projected net income if sales are expected to
Increase by 15%?

• A) $50,400
• B) $54,432
• C) $57,961
• D) $72,641
• E) $94,500

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Definitions:

Implied Warranties

Legally inferred guarantees that ensure products meet minimum quality standards, providing protection beyond explicit statements.

Reasonably Fit

A measure of whether a product meets the ordinary purposes it is intended for, based on what a reasonable person would expect.

Ordinary Purposes

The normal and expected use of a product or service as intended by the manufacturer.

Merchantable Food

Food products that meet the minimum quality standards set by law, making them fit for sale or consumption.