CORRECT ANSWER C. THE ONLY COMBINATION OF FACTORS THAT IS CORRE...

262.

Correct answer c. The only combination of factors that is correct is a variable cost ratio of

32% and operating income of $9,600,000.

Variable cost ratio: $60 – ($60 x .2) = $48 ÷ $150 = 32%

Contribution margin

$17,850,000

[175,000 x ($150 - $48)]

Fixed costs*

8,250,000

Operating income

$ 9,600,000

*Current fixed costs $9,000 ($60 x 150,000) - $750,000 eliminated