Last Month, Brand Products Manufactured 25,000 Calculators and Sold 23,000

Multiple Choice

Last month, Brand Products manufactured 25,000 calculators and sold 23,000 of these calculators at a price of $10.00 each.Manufacturing costs consisted of direct labor, $30,000; direct materials, $32,000; variable manufacturing overhead, $3,500; fixed manufacturing overhead, $21,500.Selling and administrative costs are all fixed and totaled $24,000.Beginning inventory consists of no units.Brand Products uses full costing.How much will the company's gross margin increase if sales increase 10%?

A) Less than 10%
B) More than 10%
C) 10%
D) It depends on other factors not given.