1. Violet Sales Corp, reports the year-end information from 2019 as follows:

Sales (35,625 units) - $285,000

Cost of Goods Sold- 116,000

Gross Margin- 169,000

Operating Expenses- 154,000

Operating Income- 15,000

Violet is developing the 2020 budget. In 2020 the company would like to increase selling prices by 3%, and as a result expects a decrease in sales volume of 12%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. Should Violet increase the selling price in 2020? Show all calculations and explain your reasoning.