Clipper Company sells two types of nail clippers. One focuses on the economy oriented customer and the other aims to satisfy the high-end clientele. The economy clipper costs $5 and has a sales price of $9. The high-end model costs $9 and sales for $15. Fixed costs associated with this product line amount to $35,880. Economy clippers constitute 70 percent of the market with the remaining 30 percent being high-end clippers. Assume Clipper Company currently sells 10,500 units of clippers and earns a $12,420 profit. Management believes the profitability can be improved by shifting the sales mix to 60 percent share for the economy line and 40 percent for the high-end line. The company believes it can continue to sell a total of 10,500 under the new sales mix. If management is able to accomplish the shift in sales mix

Multiple Choice

• profit will increase by $2,100.

• profit will increase by $14,520.

• profit will decrease $12,420.

• profit will not be affected. Please show formulas