Sales (200,000 units) $1,000,000 Cost of goods sold 680,000 Gross margin 320,000 Operating expenses 260,000 Operating income $60,000 Marsh is developing the 2017 budget. In 2017 the company would like to increase selling prices by 12.5%, and as a result expects a decrease in sales volume of 9%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.