Zipee Inc'S Unit Selling Price Is $90, the Unit Variable Costs

question 47

Multiple Choice

Zipee Inc.'s unit selling price is $90, the unit variable costs are $40.50, fixed costs are $170,000, and current sales are 12,000 units. How much will operating income change if sales increase by 5,000 units?

• A) $125,000 decrease
• B) $175,000 increase
• C) $75,000 increase
• D) $247,500 increase

---

Definitions:

Default Risk

The risk associated with a borrower failing to make required payments on a debt they owe.

Bond Agreement

A legal contract between the bond issuer and the bondholders, outlining the terms of the bond such as the interest rate, maturity date, and obligations of the issuer.

Treasury Securities

Government-issued debt instruments used to finance government spending as an alternative to taxation.

Maturity Risk

The risk that arises from the length of time until the principal amount of a fixed-income investment becomes due and payable, affecting the investment's exposure to interest rate changes.