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Grime-X is studying the profitability of a change in operation and has gathered the following information: Picture Current operation Anticipated operation Fixed cost $38,000 $48,000
Grime-X is studying the profitability of a change in operation and has gathered the following information: Picture
Current operation Anticipated operation
Fixed cost $38,000 $48,000
Selling price $16 $22
Variable cost $10 $12
Sales (units) 9000 6000
Should Grime-X make the change?
(A) No, because the company will be worse off by $4,000.
(B) No, because sales will drop by 3,000 units.
(C) No, because the company will be worse off by $22,000.
(D) It is impossible to judge because additional information is needed.
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