Variable Costs as a Percentage of Sales for Lemon Inc

question 125

Multiple Choice

Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much will operating income change if sales increase by $40,000?

• A) $8,000 increase
• B) $8,000 decrease
• C) $30,000 decrease
• D) $30,000 increase

---

Definitions:

Jurisdiction and Control

Refers to the authority which a legal body has to govern or enforce laws within a certain area or over certain persons.

Celestial Body

An object in space such as a planet, star, moon, or asteroid that is located outside Earth's atmosphere.

Outer Space Treaty

An international agreement that forms the basis of international space law, outlining principles for space exploration and usage, including the prohibition of weapons of mass destruction in space.

Appropriation

The act of taking something for one's own use, typically without the owner's permission.