Roy's Raingear Produces a Single Product and Reports the Following

question 141

Multiple Choice

Roy's Raingear produces a single product and reports the following data:

If the company reduces its price to $7.75,it believes that the volume will go up to 15,000 units.
How would this change affect operating income?

• A)It will go up by $10,670.
• B)It will go up by $15,920.
• C)It will go down by $10,670.
• D)It will go down by $15,920.

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Definitions:

Assets

Economic resources or valuable items owned by individuals or organizations that have potential or actual value and can contribute to wealth.

Wealth

An abundance of valuable resources or material possessions, or the control of such assets.

Stocks

Financial instruments that represent an ownership share in a company, granting the holder a claim on part of the company's assets and profits.

Status Groups

Subsets within a society distinguished by shared characteristics such as occupation, lifestyle, or prestige, often influencing social stratification.