A Company Has Provided the Following Data

question 308

Multiple Choice

A company has provided the following data:
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.

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Definitions:

Group Dynamics

The study of the behavior, interactions, and psychological processes that occur within a social group.

Risky Shift

The phenomenon where groups tend to make riskier decisions together than individuals would make on their own.

Polarization

The process or phenomenon through which opinions, attitudes, or behaviors become increasingly extreme or divided.

Groupthink

A psychological phenomenon occurring within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.