Markham Company Has a Contribution Margin Ratio of 25

question 140

Multiple Choice

Markham Company has a contribution margin ratio of 25%.The company is considering a proposal that will increase sales by $150,000.What increase in profit can be expected assuming total fixed costs increase by $25,000? (Do not round your intermediate calculations. )

• A) $6,250
• B) $31,250
• C) $37,500
• D) $12,500

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Definitions:

Increase Sales

Strategies and efforts made to elevate the number of products sold or services rendered, boosting revenue.

Integrated Marketing

A strategy that combines all aspects of marketing communication like advertising, sales promotion, and public relations to provide a consistent message across all audiences.

Promotional Message

A communication intended to persuade or inform potential customers about a product, service, or brand.

Customer Needs

The desires or requirements that customers expect from products or services to solve problems or achieve goals.