A Small Business Produces a Single Product and Reports the Following

question 62

Multiple Choice

A small business produces a single product and reports the following data: 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.

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Definitions:

Cerebral Cortex

The outer layer of the cerebrum in the brain, involved in higher brain functions such as thought, action, and perception.

Subliminal Perception

The processing of information by the brain that occurs below the level of conscious awareness.

Cochlea

A spiral-shaped, fluid-filled inner ear structure critical for converting sound vibrations into electrical signals interpreted by the brain as sound.

Membrane

A thin layer of tissue that surrounds or lines cells, organs, and other structures within the body, acting as a barrier to control the passage of substances.