Ask Question
23 December, 22:12

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

+3
Answers (1)
  1. 23 December, 22:33
    0
    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
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers