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The management of Company A feels that if the price of Product X is decreased from $40 per unit to $36 per unit, unit sales

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The management of Company "A" feels that if the price of Product X is decreased from $40 per unit to $36 per unit, unit sales will increase from the current level of 13,000 per year to 20,000 units per year. The variable cost of Product X will decrease from $24 per unit to $20 per unit due to additional discounts offered by suppliers. Unfortunately though, the fixed costs will increase from the current $100,000 to $170,000, if the sales volume increases. Management has asked you to analyze this information, (keeping in mind the CVP relationships) and determine the following: a. How much total additional contribution margin will be created? b. Will the changes cause the contribution margin ratio to increase or decrease? a. $42.000 and b. increase O a. $208,000 and b. increase a. $112.000 and b. increase US SE MI stimu Google a. $320.000 and b. decrease

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