Tony Manufacturing produces a single product that sells for $120. Variable costs per unit equal $50. The company expects total fixed costs to be $81,000 for the next month at the projected sales level of 3000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. Suppose that management believes that a 11% reduction in the selling price will result in a 11% increase in sales. If this proposed reduction in selling price is implemented operating income will increase by $18.744 operating income will decrease by 539,600 operating income will decrease by $20,856 operating income will increase by $20.856