Reference: 18_05 Thomas Company Has Total Fixed Costs of $360,000 and Variable

question 40

Multiple Choice

Reference: 18_05
Thomas Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units.
-What are the contribution margin and net income under the revised conditions?

• A) $650,000 and $280,000 respectively.
• B) $400,000 and $40,000 respectively.
• C) $280,000 and $40,000 respectively.
• D) $390,000 and $20,000 respectively.
• E) $400,000 and $20,000 respectively.

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Definitions:

Organic Structures

Organizational frameworks characterized by flexibility, decentralized decision-making, and a lack of strict hierarchies or rules.

Dynamic Environments

refers to settings or contexts that are constantly changing, often unpredictably, requiring organizations and individuals to adapt quickly.

Team-Based Structure

An organizational arrangement where work is organized around teams rather than traditional hierarchies, facilitating collaboration and flexibility.

Role Ambiguity

Refers to a situation where an individual lacks clear information or understanding about their job responsibilities, expectations, or the scope of their role.