question 74

B. $153,846 C. $100,000 D. $132,000 74. Thomas Corporation developed the followin g income statement using a contribution margin approach Thomas Corp Proj. US Yr. End 12/31 Sales $750,000 Less variable costs: Variable manufacturing costs $280,000 Variable selling costs 120,000 Total variable costs $400,000 Contribution margin $350,000 Less fixed costs: Fixed manufacturing costs $130,000 Fixed selling and administrative costs 80,000 Total fixed costs $210,000 Operating income 140,000 The projected income statement was based on sales of 100,000 units. Thomas has the capacity to produce 120,000 units during the year Required: A. Determine the break-even point in units. B. The sales manager believes the company could increase sales by 8,000 units if advertising expenditures were increased by $22,000. By how much will income ncrease or decrease if this plan is put into effect? What is the maximum amount the company could pay for advertising if the sales would really increase by 8,000 units? C