Zhou Company Is Facing a $7 Increase in the Variable

question 189

Multiple Choice

Zhou Company is facing a $7 increase in the variable cost of producing one of its products for the upcoming year.Because of this situation,the sales manager has made a proposal to increase the selling price of the product while increasing the advertising budget at the same time.The price increase will lower sales volume,but the other changes may help the company maintain its profit margins.Zhou has provided the following information regarding the current year results and the proposal made by the sales manager:

Relative to the current year,the sales manager's proposal will ________.

• A)decrease operating income by $158,000
• B)increase contribution margin by $60,000
• C)decrease the unit breakeven point
• D)decrease operating income by $218,000

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Definitions:

Environmental Revolution

A significant change in society's approach to environmental conservation and sustainability, often driven by policy, innovation, and cultural shifts.

Sufficiency Revolution

A paradigm shift towards valuing enough over excess, emphasizing sustainable living and resource use.

Energy Conservation

The practice of reducing the consumption of energy resources by using less of an energy service.

Environmental Literacy

The understanding of environmental concepts, issues, and data to make informed decisions regarding the environment.