A Company Has Variable Costs That Are 1/8 the Value

Multiple Choice

A company has variable costs that are 1/8 the value of their sales revenues. Total net income for the most recent period was a profit of $50 400 and sales were $500 000. The company has started a new marketing campaign that they hope will increase sales, but it will require additional advertising of $15 000. How many sales dollars does the company have to generate in order to remain at the same level of profitability as before the new ad campaign?

A) $517 142.86
B) $387 100.00
C) 392 100.00
D) $387 100.86
E) 392 100.86