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