Answer the Following Questions Using the Information Below

question 88

Multiple Choice

Answer the following questions using the information below:
Gosford Manufacturing produces a single product that sells for $200.Variable costs per unit equal $50.The company expects total fixed costs to be $140 000 for the next month at the projected sales level of 2000 units.In an attempt to improve performance,management is considering a number of alternative actions.Each situation is to be evaluated separately.
-Suppose that management believes that a 20% reduction in the selling price will result in a 20% increase in sales.If this proposed reduction in selling price is implemented:

• A)operating profit will decrease by $36 000.
• B)operating profit will decrease by $80 000.
• C)operating profit will increase by $36 000.
• D)operating profit will increase by $44 000.

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Definitions:

Verifiable Work Activities

Tasks or duties that can be proven or confirmed through evidence or testimony to have been completed.

Management By Objectives (MBO)

A strategic management model that aims to improve the performance of an organization by clearly defining objectives that are agreed upon by both management and employees.

Supervisor/Team Leader

A role within organizations responsible for overseeing the operations of a team and guiding team members towards achieving set objectives.

Subordinates/Team Members

Individuals who work under the supervision of someone else in an organization, contributing to the team's objectives.