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Commercial Carpets manufactures custom mats. The details on its standard run of a 1 m2m mat is as follows: The production manager has indicated that
Commercial Carpets manufactures custom mats. The details on its standard run of a 1 m2m mat is as follows: The production manager has indicated that unit variable costs will be increasing by 10%. In an effort to protect profits, the sales manager suggested increasing the selling price by 10% as well. However, an analyst thinks a 10% increase in price will result in a 5% decrease in sales volume. If all these things occur, how much will operating income change? a. increase of $770 b. decrease of $5,576 c. decrease of $444
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