Raymond & Sons Generates an Average Contribution Margin Ratio of 45

Raymond & Sons generates an average contribution margin ratio of 45% on its sales.Management estimates that by spending $3,500 more per month to rent additional facilities,the business will be able to increase operating income by $10,000 per month.Management must feel that the additional facilities will increase monthly sales volume (in dollars) by:

A) $4,725.
B) $8,775.
C) $13,500.
D) $30,000.

Correct Answer:

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