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skelet666 [1.2K]
3 years ago
15

The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will

cost $27,000. If sales increase by $88,000, the company's net operating income will increase by:
a. $30,800
b. $30,200
c. $3,800
d. $74,750
Business
1 answer:
Ann [662]3 years ago
8 0

Answer:

The correct answer is B.

Explanation:

Giving the following information:

The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $27,000 and will increase sales by $88,000.

Effect on income= Increase on income - variable costs - fixed costs

Effect on income= 88,000 - (0.35*88,000) - 27,000= $30,200

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