Reference: 18_05 Thomas Company Has Total Fixed Costs of $360,000 and Variable

Reference: 18_05
Thomas Company has total fixed costs of $360,000 and variable costs of $14 per unit. If the unit sales price is reduced from $24 to $20 and advertising is increased by $10,000, sales will increase from 40,000 to 65,000 units.
-What are the contribution margin and net income under the current conditions?

A) $650,000 and $280,000 respectively.
B) $400,000 and $40,000 respectively.
C) $280,000 and $40,000 respectively.
D) $390,000 and $20,000 respectively.
E) $400,000 and $20,000 respectively.