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Advanced Enterprises reports yearend information from 2019 as follows: Sales (161000 units) $963,000 Cost of goods sold (644000) Gross margin 319000 Operating expenses (270000) Operating

Advanced Enterprises reports yearend information from 2019 as follows:

Sales (161000 units) $963,000

Cost of goods sold (644000)

Gross margin 319000

Operating expenses (270000)

Operating income 49000

Advanced is developing the 2020 budget. In 2020 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 9%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. Should Advanced increase the selling price in 2020?

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