A Company Has Variable Costs That Are 4/7 the Value

question 10

Multiple Choice

A company has variable costs that are 4/7 the value of their sales revenues. Total net income for the most recent period was a profit of $53 770 and sales were $420 000. The company has started a new marketing campaign that they hope will increase sales, but it will require additional advertising of $6400. How many sales dollars does the company have to generate in order to remain at the same level of profitability as before the new ad campaign?

• A) $434 933.33
• B) $326 357.50
• C) $420 210.00
• D) $140 396.67
• E) $105 297.50

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