Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics:

Sales price	$	22	per unit
Variable costs		6	per unit
Fixed costs		21,000	per month

Assume that the projected number of units sold for the month is 6,500. Consider requirements (b), (c), and (d) independently of each other.

Required:

a. What will the operating profit be?

b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? (Do not round intermediate calculations.)

c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? (Do not round intermediate calculations.)

d. Suppose that fixed costs for the year 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 year? Will profit go up? Down? By how much? (Do not round intermediate calculations.)

Derby Phones is considering the rtroduction of model ot hesdphones with th e folloung price and cost oharacten tics: new Sales price rable costs Fixed costs 22 per unit 6 par unit 21,000 per monch asu that t the projected number of unts sold for the month is 6,600. Conaider requirements (b (e), and (y independently of each other. Required: a. What uil the operating proft be? b. What is the impact on operating profit if the sales prioe decrea by 10 peroent? Ihoreases by 20 penc ent? Do not round intermediate oalculations.) Sales pice dacreases by 10 Operranting rofit by Sales price increases by 2D Operating by "dhat isthe impact on operating profit it variable costs per unt deorease by 10 percent? h crease by 20 pement?Do not round interme ate calouations.) ariablecoats per unt decrease by 1D pecent briable coats per 20 Operating unt inorease by Operating d. Suppose that fixed costs for the year are 10 percent lower than prejected, and variable costs per unit are 10 percent higher than projected. hat impact uil these cost changes have on opersring profit for the year? Mil proft go up? Doun? By how much?(Do not round intermediate cal oul ations.)