Pool Company’s variable expenses are 36% of sales. Pool is contemplating an advertising campaign that will cost $20,000. If sales increase by $80,000, the company’s net operating income should increase by:

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Pool Company’s variable expenses are 36% of sales. Pool is contemplating an advertising campaign that will cost $20,000. If sales increase by $80,000, the company’s net operating income should increase by:

A. $28,800
B. $64,000
C. $8,800
D. $31,200

Answer: D

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