Ribb Corporation Produces and Sells a Single Product

question 57

Multiple Choice

Ribb Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $913,000 per month. The company is currently selling 9,000 units per month. Management is considering using a new component that would increase the unit variable cost by $6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change?

• A)decrease of $3,200
• B)increase of $50,800
• C)decrease of $50,800
• D)increase of $3,200

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Definitions:

pH

A scale that measures the acidity or alkalinity of a solution, where 7 is neutral, values below 7 are acidic, and values above 7 are alkaline.

Mathematical Relationship

A connection between two or more variables or quantities, often expressed using equations or formulas.

pH

A scale used to specify the acidity or basicity of an aqueous solution, ranging from 0 (acidic) to 14 (basic).

Buffer Solution

A solution that can resist changes in pH when small quantities of an acid or base are added, maintaining a relatively constant pH.