Raymond & Sons Generates an Average Contribution Margin Ratio of 45

question 116

Multiple Choice

Raymond & Sons generates an average contribution margin ratio of 45% on its sales.Management estimates that by spending $3,500 more per month to rent additional facilities,the business will be able to increase operating income by $10,000 per month.Management must feel that the additional facilities will increase monthly sales volume (in dollars) by:

• A)$4,725.
• B)$8,775.
• C)$13,500.
• D)$30,000.

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Definitions:

Revenue Collected

The total amount of money received by a company or organization from its sales or services.

Income Transfers

Payments made by the government to individuals through various welfare programs, without the recipient providing goods or services in return.

Federal Spending

The amount of money that the national government expends on various programs, projects, and services.

GDP

Gross domestic product, a monetary measure of the market value of all final goods and services produced in a country during a specific period.