A. The best way to solve this is to create  income statements for the three options. This answer could result from any error in calculations or in evaluating the results of the calculations. See correct answer for details.

B. The best way to solve this is to create  income statements for the three options. This answer could result from any error in calculations or in evaluating the results of the calculations. See correct answer for details.

C. The best way to solve this is to create income statements for the three options. The sales values are calculated based on selling price multiplied by units sold. Manufacturing costs are the $30 given in the problem multiplied by the number of units sold. Commisisons under Option X and Y are 10% of sales, and only Option Y has advertising expenses. From highest to lowest option, Z, X, Y is the correct answer. Here are the income statements:

                                X              Y             Z

                             -----------    -----------    -----------

    Sales                    $360,000    $456,000     $448,000

    Manufacturing Costs     300,000      360,000     420,000

    Commissions             36,000        45,600         0

    Advertising                   0          30,000         0

                             ------------    ------------  ------------

    Operating Income        $ 24,000   $ 20,400    $ 28,000  

D. The best way to solve this is to create  income statements for the three options. This answer could result from any error in calculations or in evaluating the results of the calculations. See correct answer for details.