Accounting how many of a percentage increase would you expect in the company made income Bell Brothers has $3,000,000 in sales. Fixed costs are estimated to be$100,000 and variable costs are equal to 50% of sales. The company has$1,000,000 in debt outstanding at a before-tax cost of 10%. If BellBrothers' sales were to increase by 20%, how much of a percentageincrease would you expect in the company's net income?a. 19.79%b. 18.80%c. 21.92%d. 23.08%e. 20.83%

Step 1:- Define Net IncomeWithin a business, net income refers to the remainder of revenue after all…

Answered: Bell Brothers has $3,000,000 in sales.…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 13E

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Bell Brothers has $3,000,000 in sales. Its fixed costs are estimated to be $200,000, and its variable costs are equal to 50 percent of sales. The company has $1,000,000 in debt outstanding with a before-tax cost of 10 percent. If Bell Brothers' sales increase by 20 percent, by what percent should its earnings per share (EPS) change? 23.08% 20.00% 21.67% 16.00% 25.00%

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