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Question 47 (7 points) Listen Fairmount Manufacturing's variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $55,000. If sales are expected to increase $100,000, by how much will the company's net income increase? 1) $45,000 2) $15,000 3) $30,000 O4) $70,000 Question 48 (3 points) Listen If the activity level increases 10%, total variable costs will 1) remain the same. O2) increase by more than 10%. 3) decrease by less than 10%. 4) increase 10%. Question 49 (3 points) Listen Contribution margin 1) is always the same as gross profit margin. O2) excludes variable selling costs from its calculation O 3) is calculated by subtracting total manufacturing costs per unit from sales revenue per unit. 4) equals sales revenue minus variable costs. Question 50 (3 points) Listen The equation which reflects a CVP income statement is 1) Sales - Cost of goods sold + Operating expenses + Net income. 2) Sales + Fixed costs - Variable costs + Net income. 3) Sales - Variable costs + Fixed costs = Net income. 4) Sales - Variable costs - Fixed costs - Net income