Zippy Company Has a Product That It Currently Sells in the Market

question 114

Multiple Choice

Zippy Company has a product that it currently sells in the market for $50 per unit. Zippy has developed a new feature that, if added to the existing product, will allow Zippy to receive a price of $65 per unit. The total cost of adding this new feature is $26,000 and Zippy expects to sell 1,600 units in the coming year. What is the net effect on next-year's operating income of adding the feature to the product?

• A) $2,000 increase in operating income.
• B) $3,000 decrease in operating income.
• C) $3,500 increase in operating income.
• D) $4,000 decrease in operating income.
• E) $2,000 decrease in operating income.

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Definitions:

Physically Attractive

Pertains to features or qualities that are aesthetically pleasing or beautiful to the majority.

Testosterone

A steroid hormone that plays a key role in the development of male reproductive tissues, as well as promoting secondary sexual characteristics such as increased muscle and bone mass, and the growth of body hair.

Aggression

Behavior intended to harm or intimidate others, which can be physical or verbal.

Scapegoating

Displacing aggression onto members of minority groups or other innocent targets not responsible for the frustrating situation.