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:

Neutral Variation

Variation that does not appear to confer any selective advantage or disadvantage to the organism.

Adaptive Variation

Differences among individuals in a population that result from genetic changes and environmental factors, enabling better survival and reproduction.

Genetic Polymorphism

The presence in a population of two or more alleles for a given gene locus.

Natural Selection

A fundamental mechanism of evolution where organisms better adapted to their environment tend to survive and reproduce more than others.