Markham Industries is studying the profitability of a change in operation and has gathered the following information:

Current Operation. Anticipated Operation

Fixed costs. $40,000 $53,000

Selling price. $21 $27

Variable costs. $14 $16

Sales (units) 10,000 7,000

Should Markham Industries make the change?

• Yes, the company will be better off by $7,000.
• No, because the company will be worse off by $26,000.
• It is impossible to judge because additional information is needed.
• No, because sales will drop by 3,000 units.
• No, because the company will be worse off by $6,000.