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Tony Manufacturing produces a single product that sells for $80. Variable costs per unit equal $40. The company expects total fixed costs to be
Tony Manufacturing produces a single product that sells for $80. Variable costs per unit equal $40. The company expects total fixed costs to be $82,000 for the next month at the projected sales level of 2,700 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: (Do not round intermediary calculations and round the final answer to the nearest whole number.) : a. operating income will increase by $14,494 b. operating income will decrease by $14,494 c. operating income will decrease by $23,760 d. operating income will increase by $9,266
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