Data Concerning Grodi Corporation's Single Product Appear Below: Fixed

question 94

Multiple Choice

Data concerning Grodi Corporation's single product appear below: Fixed expenses are $324,000 per month.The company is currently selling 5,000 units per month.Management is considering using a new component that would increase the unit variable cost by $9.Since the new component would increase the features of the company's product,the marketing manager predicts that monthly sales would increase by 500 units.What should be the overall effect on the company's monthly net operating income of this change?

• A)decrease of $4,500
• B)decrease of $40,500
• C)increase of $40,500
• D)increase of $4,500

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Definitions:

Welded Rhyolite

Is a type of volcanic rock that has been superheated and compacted under extreme conditions, resulting in a dense, hard rock.

Calderas

Large, usually circular depressions in the ground caused by volcanic activity, specifically the collapse of a magma chamber after a volcanic eruption.

Caldera-forming Eruption

A volcanic eruption significant enough to collapse the summit area and form a large, basin-like depression called a caldera.

Minoan

Relating to the Bronze Age civilization centered on Crete (circa 2600–1400 BC), known for its advanced culture, art, and architecture, including the palace at Knossos.