Fashion Pro currently manufacture their novelty t-shirts for a contribution margin of 71%. With a sales revenue of $748,992, their fixed costs require 42% of their sales. They have signed with a new company that can produce their shirts, increasing their contribution margin to 76%. How will this change their net profit margin, assuming the sales revenue does not change?
- A) Grows by 5% from 29% to 34%
- B) Shrinks by 5% from 34% to 29%
- C) Grows by 5% from 24% to 29%
- D) Shrinks by 5% from 39% to 34%
- E) The correct answer is not listed