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Variable costs as a percentage of sales is 80%. If sales are $400,000 and fixed costs are $80,000, how much would operating income change if
Variable costs as a percentage of sales is 80%. If sales are $400,000 and fixed costs are $80,000, how much would operating income change if sales decrease by $50,000?
a.$10,000 decrease
b. $5,000 decrease
c.$40,000 decrease
d. $20,000 decrease
e. None of the above
Please explain why
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