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Variable Costs as a Percentage of Sales for Leamon Inc

Question 1

Multiple Choice

Variable costs as a percentage of sales for Leamon Inc. are 75%, current sales are $600,000, and fixed costs are $110,000. How much would operating income change if sales increase by $50,000?


A) $37,500 increase
B) $12,500 decrease
C) $37,500 decrease
D) $12,500 increase

Correct Answer:

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