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