A company sells several products. The most recent year's sales and income information is shown below for the company as a whole:

Sales Revenue = $ 850,000 Variable costs = $612,000 Total fixed cost = $180,000 Net income = $58,000

The sales manager has recommended two alternative marketing plans for next year. Plan 1 is to spend 45,000 on advertising to increase overall sales by $200,000. Plan 2 is to increase the sales commission. This option would increase the weighted average variable cost ratio by 3% but would also increase sales by $300,000. Compared to last year what is the gain or loss expected for Plan 1 and for Plan 2?

a. Plan 1: $11,000 gain and Plan 2: $16,500 loss b. Plan 1: $5,000 gain and Plan 2: $75,000 gain c. Plan 1: $11,000 gain and Plan 2: $75,000 gain d. Plan 1: $11,000 gain and Plan 2: $49,500 gain e. Plan 1: $5,000 gain and Plan 2: $49,500 gain