- 2 X100 20480. THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 15 to 17. Martha Manufacturing produces a single product that sells for $45. Variable costs per unit equal $27. The company expects total fixed costs to be $72,000 for the next month at the projected sales level of 5,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. 45-27 = 18 FC 15, What is the percentage sensitivity of the variable cost of the product? -3.6 a. 0.133 % 26.01.33% SP Xunt 5000 x 45 = 225 VC x units 5ooox al =-13 C 13.33% ( TOTAL CM d. Cannot be computed VARIABLE Casr 70 = 13.33 To Operating Income la 16. Suppose that management believes that a 5% reduction in the selling price will result in a 10% increase in sales. If this proposed reduction in selling price is implemented, a. operating income will decrease to $86.625. b. operating income will increase to $ 3.375. - decrease c. operating income will decrease by $14,625. d. operating income will increase to $14,625. Recrease 17) What is the percentage sensitivity of the selling price and the fixed cost? a. 8.00% and 25.00% OP 18000 3.6 b. 25.00 % and 8.00 % 5000 rotina Petre c. 8.00% and 13.3% d. none of the above .6 Income 18000 = ?? 3.6 XI 450