Houpe Corporation Produces and Sells a Single Product

question 32

Multiple Choice

Houpe Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.
Management is considering using a new component that would increase the unit variable cost by $5. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 300 units. What should be the overall effect on the company's monthly net operating income of this change?

• A) decrease of $2,100
• B) decrease of $27,900
• C) increase of $2,100
• D) increase of $27,900

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Definitions:

Literacy Rates

The percentage of people in a specified population who have the ability to read and write at a specified age.

Intensive Instruction

involves a highly concentrated and focused method of teaching, aimed at improving learning outcomes for students who require additional support beyond standard classroom instruction.

Middle School Education

Middle school education refers to the stage of schooling that follows elementary school and serves as a bridge to high school, typically encompassing grades 6-8.

Academic Achievement

The degree to which an educator, learner, or academic establishment has reached their immediate or extended educational objectives.