Barrier Corporation Is Performing a Sensitivity Analysis on One of Its

question 35

Multiple Choice

Barrier Corporation is performing a sensitivity analysis on one of its product.The product currently sells for $75 per unit, with variable cost of $46 per unit and fixed costs of $100,000.Barrier currently sells 80,000 units of this product.Barrier is considering reducing its price by 10%.If prices decrease, then it is expected that units sold will increase by 8%.Calculate the change in operating income.

• A)$462,400 decrease
• B)$248,500 decrease
• C)$462,400 increase
• D)$248,500 increase

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Definitions:

Brachial

Pertaining to the arm, specifically the area of the upper limb between the shoulder and the elbow.

Rectal Temperature

A measurement of body temperature taken from the rectum, which provides a core reading that is closely aligned with the body's true temperature.

Sphygmomanometer

A device used to measure blood pressure, consisting of an inflatable cuff to restrict blood flow and a manometer to measure the pressure.

Mercury

A chemical element with the symbol Hg and atomic number 80, known for its use in thermometers, fluorescent lighting, and dental amalgams.