The Following Information Relates to Paterno Company If a Manager at Paterno Desired to Determine the Percentage

question 40

Multiple Choice

The following information relates to Paterno Company: $\begin{array} { | l | r | } \hline \text { Sales revenue } & \$ 10,000,000 \\\hline \text { Contribution margin } & 4,000,000 \\\hline \text { Net income } & 1,000,000 \\\hline\end{array}$ If a manager at Paterno desired to determine the percentage impact on net income of a given percentage change in sales, the manager would multiply the percentage increase/decrease in sales revenue by:

• A)0.25.
• B)0.40.
• C)2.50.
• D)4.00.
• E)10.00.

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Definitions:

Desirable Behavior

Actions or conducts that are socially or culturally valued and encouraged within a certain context or environment.

Increase Magnitude

The act of making something greater in size, amount, importance, or intensity.

Reinforcement

In behavioral psychology, any event that strengthens or increases the likelihood of a behavior.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response; in biology, the end of an organism or a group of organisms.