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Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics: Sales price Variable costs Fixed
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics: Sales price Variable costs Fixed costs $ Assume that the projected number of units sold for the month is 6,500. Consider requirements (b), (c), and (d) independently of each other. Operating profit 19 per unit 5 per unit 27,000 per month Required: a. What will the operating profit be? $ 64,000 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.) Sales price decreases by 10 percent: Sales price increases by 20 percent: Operating profit decreases Operating profit increases by by 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.) Variable costs per unit decrease by 10 percent: Variable costs per unit increase by 20 percent: Operating profit increases Operating profit decreases by by
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Lets calculate the operating profit step by step and then analyze the impact of changes in the sales price a Operating Profit Calculation Operating profit is the difference between total revenue and t...Get Instant Access to Expert-Tailored Solutions
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