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:

Z Score

A statistical measure that describes a value's relationship to the mean of a group of values, measured in terms of standard deviations from the mean.

Scores

Quantitative values assigned to individuals to represent or measure specific traits or outcomes.

Z Score

A metric that shows how far a value stands from the mean within a collection of values, denoted in units of standard deviations.

Scores

Numerical values assigned to represent the performance, achievement, or characteristics of individuals or items.