A Small Business Produces a Single Product and Reports the Following

question 140

Multiple Choice

A small business produces a single product and reports the following data: $$\begin{array} { | l | r | l | } \hline \text { Sales price } & \$ 8.50 & \text { per unit } \\\hline \text { Variable cost } & \$ 5.25 & \text { per unit } \\\hline \text { Fixed cost } & \$ 22,000& \text { per month } \\\hline \text { Volume } & 10,000 &\text { units per month } \\\hline\end{array}$$ The company believes that the volume will go up to 12,000 units if the company reduces its sales price to $7.50. How would this change affect operating income?

• A) It will increase by $5500.
• B) It will increase by $10,500.
• C) It will decrease by $5500.
• D) It will decrease by $10,500.

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Definitions:

Numeric Values

Quantities or numbers that are used in calculations and data analysis, essentially another term for numerical data with an emphasis on their value aspect.

Criteria

Standards or conditions that are used to judge, filter, or select data in various contexts, including searches, queries, and evaluation processes.

Filter Arrows

Icons or buttons typically found in table headers or pivot tables in spreadsheet software that allow users to filter or sort data based on the column content.

Filter Button

A tool in spreadsheet and database applications that allows users to sort data based on specified criteria, making it easier to find specific information.