Cambridge, Inc., is considering the introduction of a new calculator with the following price and cost characteristics:

Sales price	$	18	each
Variable costs	$	10	each
Fixed costs	$	20,000	per month

Assume that the projected number of units sold for the month is 7,000. Consider requirements (2), (3), and (4) independently of each other.

Requirement 1:

What will the operating profit be? (Omit the "$" sign in your response.)

Operating profit

$

Requirement 2:

(a)	What is the impact on operating profit if the sales price decreases by 10 percent? (Do not round intermediate calculations. Omit the "$" sign in your response.)

Operating profit (Click to select)increasesdecreases by

$

(b)	What is the impact on operating profit if the sales price increases by 20 percent? (Do not round intermediate calculations. Omit the "$" sign in your response.)

Operating profit (Click to select)decreasesincreases by

$

Requirement 3:

(a)	What is the impact on operating profit if variable costs per unit decrease by 10 percent? (Omit the "$" sign in your response.)

Operating profit (Click to select)decreasesincreases by

$

(b)	What is the impact on operating profit if variable costs per unit increase by 20 percent? (Omit the "$" sign in your response.)

Operating profit (Click to select)decreasesincreases by

$

Requirement 4:

Suppose that fixed costs for the month are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the month? Will profit go up? Down? By how much? (Omit the "$" sign in your response.)

Operating profit (Click to select)decreasesincreases by

$