Ajax Corporation Is Performing a Sensitivity Analysis on One of Its

question 92

Multiple Choice

Ajax Corporation is performing a sensitivity analysis on one of its product.The product currently sells for $210 per unit, with variable cost of $90 per unit and fixed costs of $400,000.Ajax currently sells 12,000 units of this product.Ajax is considering raising its price by 15%.If prices increase, then it is expected that units sold will decrease by 10%.Calculate the change in operating income.

• A)$196,200 decrease
• B)$248,500 decrease
• C)$196,200 increase
• D)$248,500 increase

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Definitions:

Network Diagram

A visual representation of a project's tasks and the relationships between them, showing the sequence of tasks and dependencies.

Gantt Chart

A visual project management tool that outlines a project schedule, showing the start and finish dates of various elements or tasks within the project.

PERT/CPM Network

Pertains to the management tools known as Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM), used for planning, scheduling, and controlling complex projects.

Arnold Palmer Hospital

A highly regarded healthcare institution known for its specialized services and commitment to patient care.