Holly Incorporated, which produces and sells a single product, has provided the following data:

Sales: 2,000 units

Selling price: 60 per unit

Variable expense: 40 per unit

Fixed expense: 20,000

If the sales volume decreases by 50% and the variable expense per unit increases by 15%,

net operating income is expected to:

Select one:

a. Decrease by 26,000

b. Decrease by 1,000

c. Decrease by 19,000

d. Decrease by 60,000