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Papaya Corporation has the following product information: Sales price $8.50 per unit Variable cost $5.00 per unit Fixed cost $22,000 per month Volume 10,500 units
Papaya Corporation has the following product information:
Sales price | $8.50 | per unit |
Variable cost | $5.00 | per unit |
Fixed cost | $22,000 | per month |
Volume | 10,500 | units per month |
The company believes that the volume will go up to 12,000 units if the company reduces its sales price to $7.25. How would this change affect operating income?
Group of answer choices
It will increase by $14,750.
It will decrease by $14,750.
It will decrease by $9750.
It will increase by $9750.
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