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The following information is for the production of pocket knives by Slay Corp: Selling price per case $30.00 Variable cost per case $15.00 Current annual
The following information is for the production of pocket knives by Slay Corp: Selling price per case $30.00 Variable cost per case $15.00 Current annual sales 100,000 units Current fixed costs $500,000 The company expects a reduction of 5% in the selling price, and an increase of $150,000 in a machine for personalized engraving. The result will be an increase of 40% in unit sales. What is the change in net income (increase or decrease)? A. $196,000 B. $240,000 C. $274,000 D. $221,200 E. None of the above
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