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Answer the following three questions using the information below: Ossmann Enterprises reports year-end information from 20x4 as follows. Sales (80,000 units) $480,000 Cost of goods

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Answer the following three questions using the information below: Ossmann Enterprises reports year-end information from 20x4 as follows. Sales (80,000 units) $480,000 Cost of goods sold 320,000 Gross margin 160.000 Operating expenses 130,000 Operating income $ 30,000 Ossmann is developing the 20x5 budget. In 20x5 the company would like to increase selling prices by 8%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant . Assume that COGS is a variable cast and that operating expenses are a fixed cost. Should Ossmann increase the selling price in 20X5? No, because gross margin decreases for 20x5 Yes, because sales revenue is increased for 20X5 Yes, because operating income is increased for 20X5 No because sales volume decreases for 20X5

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