Putnam Company
Below Is an Income Statement for Putnam Company $\underline{\$150,000}$

Multiple Choice

Putnam Company
Below is an income statement for Putnam Company:
Sales                                                       $ 600,000
Variable costs                                          $\underline{\$150,000}$
Contribution margin                               $\$ 450,000$
Fixed costs                                              $\underline{(300,000) }$
Profit before taxes                                    $\underline{\$150,000}$



Refer to Putnam Company.Assuming that the fixed costs are expected to remain at $300,000 for the coming year and the sales price per unit and variable costs per unit are also expected to remain constant,how much profit before taxes will be produced if the company anticipates sales for the coming year rising to 125 percent of the current year's level?

A) $112,500
B) $187,500
C) $262,500
D) $300,000