Carrolton, Inc

question 111

Essay

Carrolton, Inc. currently sells widgets for $80 per unit. The variable cost is $30 per unit and total fixed costs equal $240,000 per year. Sales are currently 20,000 units annually.
The company is considering a 20% drop in selling price that they believe will raise units sold by 20%. Assuming all costs stay the same, what is the impact on income if they make this change?

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Definitions:

Butterfly Collection System

A type of IV needle system used for drawing blood that has a thin, needle-like tube connected to a winged end, making the insertion easier and minimizing discomfort for the patient.

Gauge Needle

A tool used in medical injections and samplings, with the gauge number indicating the needle’s thickness; a higher number represents a thinner needle.

Disposable Instrument

Tools and devices designed for single use in medical procedures to ensure sterility and prevent cross-contamination.

Manual Differential Cell Count

A laboratory method used to quantify and categorize different types of white blood cells in a blood sample.