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Anderson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $12 each and that manufacturing and other costs are as
Anderson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $12 each and that manufacturing and other costs are as follows: Variable Cost per Unit Direct material Direct labor Factory overhead Total Fixed Cost per month Factory overhead Selling and administrative $17,000 8,000 $4.00 0.40 0.60 $5.00 Total $25,000 The current monthly production and sales volume is 20,000. If the sales price per unit increases by $2.00 and unit sales decrease by 2,000 units, Anderson's monthly profit would: a. Decrease by $22,000 b. Not change c. Increase by $36,000 Cd. Increase by $22,000
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