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Liliac Company sells a single product. The selling price of the product is $300 per unit. Variable cost is $180 per unit. Fixed cost
Liliac Company sells a single product. The selling price of the product is $300 per unit. Variable cost is $180 per unit. Fixed cost is $360,000 per period. Currently, the company is selling 5,000 units of the product. The company's income is $240,000. A manager proposed the following Enhance the quality of the product. This will increase the variable cost per unit by $20 Raise the selling price by $101 Advertise by spending $90,000 more in fixed cost If this proposal is followed, the sales units will be 6,000 units (1,000 units increase from current 5,000 units) If this proposal is followed, which of the following is a correct statement? Selected Answer: C Income will decrease by $90,000 due to more advertising. The proposal is not a good idea. Answers: A Income will be positive at $190,000. The proposal is a good idea. B. Income will decrease by $170,000. The proposal is not a good idea C. Income will decrease by $90,000 due to more advertising The proposal is not a good idea. D. Income will increase by $50,000. The proposal is a good idea,
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