A Company Has Provided the Following Data If the Sales Volume Decreases by 25%,the Variable Cost Per

question 9

Multiple Choice

A company has provided the following data:
$\begin{array}{|l|r|}\hline \text { Sales } & 3,000 \text { units } \\\hline \text { Sales price } & \$ 70 \text { per unit } \\\hline \text { Variable cost } & \$ 50 \text { per unit } \\\hline \text { Fixed cost } & \$ 25,000 \\\hline\end{array}$
If the sales volume decreases by 25%,the variable cost per unit increases by 15%,and all other factors remain the same,what will the outcome be for operating income?

• A) Decrease by $31,875.
• B) Decrease by $15,000.
• C) Increase by $20,625.
• D) Decrease by $3,125.

Explain the significance of opportunity cost in economic decision-making.

Understand the definition and role of capital in the economy.

Distinguish between different economic systems and their characteristics.

Define and apply the concepts of comparative and absolute advantage in trade.

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Definitions:

Chapter 7 Bankruptcy

A provision of the bankruptcy code that provides for "liquidation," whereby a debtor's non-exempt assets are sold and the proceeds distributed to creditors.

Unsecured

Refers to loans or debts that are not protected by collateral, making them riskier for lenders.

Secured

Refers to loans or debt that are backed by collateral, reducing the risk for lenders and often resulting in lower interest rates for borrowers.

Tax-Exempt

A status that allows an entity or income to be free from federal, state, or local tax under certain conditions.