Wright Corporation's Contribution Format Income Statement for Last Month Appears

question 134

Multiple Choice

Wright Corporation's contribution format income statement for last month appears below:
$\begin{array} {| l | r | } \hline \text { Sales } & \$ 45,000 \\\hline \text { Less: variable expenses } & \underline { 27,000 } \\\hline \text { Contribution margin } & 18,000 \\\hline \text { Less: fixed expenses } & \underline { 12,000 } \\\hline \text { Operating income } & \$ 6,000 \\\hline\end{array}$ There were no beginning or ending inventories. The company produced and sold 3,000 units during the month


-If sales decrease by 500 units in the next month,by how much would fixed expenses have to be reduced to maintain the current operating income?

• A) $7,500.
• B) $6,000.
• C) $2,000.
• D) $3,000.

---

Definitions:

Abdomen

The part of the body that lies between the thorax (chest) and the pelvis, containing most of the digestive organs among others.

Thoracic Cavity

The chamber of the body protected by the rib cage, containing the lungs and heart, among other organs.

Left Arm

The upper limb on the left side of the body, extending from the shoulder to the hand.

Right Arm

The right arm refers to the limb on the right side of the body extending from the shoulder to the wrist, including all the joints, muscles, and bones within this area.