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XYZ company is studying the profitability of a change in operation and has gathered the following information. Current Operation: Fixed Costs: $38,000, Selling Price: $16,

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XYZ company is studying the profitability of a change in operation and has gathered the following information. Current Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost: $10, and Sales (Units): 9,000. Anticipated Operation: Fixed Costs: $48,000, Selling Price: $22. Variable Cost: $10, and Sales (Units): 6,000. Should XYZ company make the change? Select one: a. Yes, the company will be better off by $8,000. b. No, because the company will be worse off by $24,000 c. No, because the company will be worse off by $8,000 d. It is impossible to judge because additional information is needed. e. No, because sales will drop by 3,000 units. XYZ Company incurred the following costs for the month of August when it observed an activity level of 5,000 units: Variable costs $32,500; Fixed costs $25,000; Mixed costs $21,500; Total costs $79,000. During October, the activity level was 16,000 units, and the total costs incurred were $178,000. If the activity level were expected to be 8,000 units for the month of December, what amount of total costs would be expected? Select one: a $106,000 b. None of the answers given c. $133,000 d. $124,000 e. $115,000 XYZ company has sales of $300,000, a contribution margin ratio of 40%, and a target profit of $30,000. If 15,000 units were sold, what is the variable cost per unit? Select one: a. $7.50 b. none of the given answers. C. $8.00 d. $12.00 e. $10.00

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