If the Selling Price Is Reduced by 5%,variable Expenses Reduced

question 171

Multiple Choice

If the selling price is reduced by 5%,variable expenses reduced by $1.00,and fixed expenses increased to a total of $38,400,how many units would need to be sold to earn an operating income of $21,000?

• A) 1,000 units.
• B) 2,700 units.
• C) 1,700 units.
• D) 2,950 units.Units required = (38,400 + 21,000)/22 = 2,700 units.

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