Violet Sales Corp, Reports the Year-End Information from 2018 as Follows

question 100

Multiple Choice

Violet Sales Corp, reports the year-end information from 2018 as follows:

Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.
Should Violet increase the selling price in 2019?

• A) Yes, because sales revenue increases for 2019.
• B) Yes, because gross margin increases for 2019.
• C) No, because sales volume decreases for 2019.
• D) No, because operating income decreases for 2019.

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Definitions:

Physiological Arousal

Refers to the body's physical response to stimuli, which can include increased heart rate, sweating, or rapid breathing.

Resolution Stage

The final phase in some psychological and physiological theories where conflicts or conditions become resolved or return to a baseline state.

Sexual Response Cycle

A four-stage model describing the physiological and emotional processes involved in sexual interaction, including excitement, plateau, orgasm, and resolution.

Rapid Decrease

A swift reduction in quantity, value, or intensity over a short period of time.