Question
Currently the company sells 50,000 units of Product A at $30 per unit. The variable cost is $18 per unit and total fixed costs are
Currently the company sells 50,000 units of Product A at $30 per unit. The variable cost is $18 per unit and total fixed costs are $500,000. Management is considering making the following changes; increase the selling price to $40 per unit which will increase variable costs per unit to $22.80. The number of unit sales will also decrease to 39,000 and remain within the relevant range. What will the difference in profit or loss be if the change is made?
Profit will increase by $468,000
Profit will increase by $70,800
Profit will decrease by $68,000
Profit will decrease by $70,800
which one is correct? i just need the correct answer, thanks
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