The manager of Sanafi Company predicts that by decreasing selling price per unit by 5%, and using higher quality raw material (which will in turn increase raw material cost per unit by $2), the unit sales will increase by 2,000 units. Should the company go with the managers decision?

2. Sanafi Company manufactures a single product. In the month of August, the company manufactured 13,000 units and sold all of them for a total of $845,000. Variable costs related to manufacturing is $11.50 and variable costs related to selling & admin is another $4. The total fixed expense for the company is $345,000