A Company Has Provided the Following Data If the Sales Volume Decreases by 25%,the Variable Cost Per

question 134

Multiple Choice

A company has provided the following data:
$$\begin{array} { | l | r | l | } \hline \text { Sales } & 3,000 & \text { Units } \\\hline \text { Sales price } & \$ 70 & \text { per unit } \\\hline \text { Variable cost } & \$ 50 & \text { per unit } \\\hline \text { Fixed cost } & \$ 25,000 & \\\hline\end{array}$$
If the sales volume decreases by 25%,the variable cost per unit increases by 15%,and all other factors remain the same,operating profit will:

• A) decrease by $31,875.
• B) decrease by $15,000.
• C) increase by $20,625.
• D) decrease by $3,125.

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