A Small Business Produces a Single Product and Reports the Following

question 64

Multiple Choice

A small business produces a single product and reports the following data:
$$\begin{array} { | l | r | r | } \hline \text { Price } & \$ 8.00 & \text { per unit } \\\hline \text { Variable cost } & \$ 5.00 & \text { per unit } \\\hline \text { Fixed cost } & \$ 21,000 & \text { per month } \\\hline \text { Volume } & 10,000 & \text { per month } \\\hline\end{array}$$
-
The company's variable cost goes up by $0.75 per unit, so they raise the price by the same amount.
Assume other factors remain the same. How would this change affect operating income?

• A) It will go up by $7,500.
• B) It will go up by $8,000.
• C) It will go down by $2,500.
• D) It will stay the same.

---

Definitions:

Preferred Leadership Style

The leadership approach favored by an individual or group, reflecting how they typically manage, influence, and guide others.

Implicit Leadership Perspective

A theory suggesting that people have preconceived notions or prototypes of what leadership qualities look like, which influence their evaluation of who is considered a leader.

Leadership Substitute

An approach or factor that makes the leadership style unnecessary or redundant due to its presence, promoting independence in teams.

Self-Leadership Competencies

Refers to the set of skills and behaviors that individuals use to guide their own performance and development proactively.