Detailed Answer
Answer (A) is correct. The increase in estimated gross profit is $32,000 ($80,000 × 40%). The incremental bad debt loss is $4,800 ($80,000 × 6%). Accordingly, the estimated net increase in operating income is $27,200 ($32,000 – $4,800). The before-tax return on sales is 34%($27,200 ÷ $80,000).