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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Answer the following questions using the information below: Brent Enterprises

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Answer the following questions using the information below: Brent Enterprises reports the year-end information from 2011 as follows: Sales (35,000 units) Cost of goods sold $280,000 105,000 Gross margin Operating expenses 175,000 100,000 Operating income $75 000 Brent is developing the 2012 budget. In 2012 the company would like to increase selling prices by 4%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that COGS is a variable cost and that operating expenses are a fixed cost. 34) Should Brent increase the selling price in 2012? A) Yes, because operating income is increased for 2012 B) No, because sales volume decreases for 2012 C) No, because gross margin decreases for 2012. D) Yes, because sales revenue is increased for 2012 h (United States)

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