Page 5 of 12 7 Bingley Inc. is a start-up company that produces smart notebooks for elementary school children. In the first year of operation, they sold 20,000 notebooks but incurred a loss of $20,000. They are trying to see if they should make some changes in their operation 1 Lower the selling price from $20 to $17. 2 Keep the variable cost per unit at $10 per unit. 3 Increase the advertising expense by $12,000. Bingley expects that the changes above would increase their sales volume (units) by 60%. What would be the impact of these changes on their profit? A. Bingley's loss will be increased by S6,000. B. Bingley will reduce their loss by $30,000 C. Bingley's loss will be reduced by $12,000. D. Bingley's loss will be reduced by $22,000. E. None of the above. Beta $6.00 $4.20 200 $2.40 3001 S660 8 de Bourgh Inc. manufactures and sells two models of car plugs: Alpha and Beta. The results for the last year for the two products appear below. Alpha Selling price per unit $4.00 Variable cost per unit Number of units sold monthly Fixed cost per month The company has developed another product, Gamma, which is of much higher quality. They plan to price it at $10 cach. The variable cost would be $5 per unit. Because of the limited production facility, the company is considering dropping Beta so that Gamma can be produced. The fixed cost will remain the same. However, the company is worried that they may not be able to sell as many units of Gamma as Beta because of the higher price. The company is also worried that Gamma might reduce the sales of Alpaha. The marketing manager estimates that the company can sell 120 units of Gamma. How many units of Alpha would they have to be able to sell to have the same profit as when they are selling Alpha and Beta? A 60.00 units 150.0 units 225.0 units D. 478.2 units E. None of the above