Edmonco Company Produced and Sold 45,000 Units of a Single

question 15

Multiple Choice

Edmonco Company produced and sold 45,000 units of a single product last year, with the following results: $\begin{array}{lr}\text { Sales revenue } & \$ 1,350,000 \\\text { Manufacturing costs: } & \\\quad \text { Variable } & 585,000 \\\text { Fixed } & 270,000 \\\text { Selling costs: } & \\\quad \text { Variable } & 40,500 \\\quad \text { Fixed } & 54,000 \\\text { Administrative costs: } & \\\quad \text { Variable } & 184,500 \\\text { Fixed } & 108,000\end{array}$ If Edmonco's sales revenues increase 15%, what will be the percentage increase in income before income taxes?

• A) 15%.
• B) 45%.
• C) 60%.
• D) 75%.
• E) None of the other answers is correct.

---

Definitions:

Government's Revenue

The total income received by the government from various sources, including taxes, fees, fines, and the sale of goods and services.

Personal Income Taxes

Taxes levied on individuals or households based on the income they earn within a given year.

Subsidies

Financial support granted by the government or a public body to help an industry or business keep the prices of a commodity or service low.

Automobile Purchases

The action or activity of buying vehicles intended for personal or commercial use on roads.