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Use the following information to answer questions 7 and 8: Company A's quarterly sales revenue and operating costs are $12,000 and $9,500, respectively. Operating costs
Use the following information to answer questions 7 and 8: Company A's quarterly sales revenue and operating costs are $12,000 and $9,500, respectively. Operating costs include $1,500 of leasing charge for computers. A new product line will increase sales revenue by 30 percent and costs (other than the leasing charge, which remains unchanged) by 35 percent. 7. If Company A includes the new product line, then: a. sales revenue will increase by $3,200. b. operating costs will increase to $12,300. C. operating profits will increase by $1,100. d. operating costs are not relevant. 8. The leasing charge: a. is differential b. is relevant to the decision. c. plays no role in the decision. d. will not change in the future
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