A small business produces a single product and reports the following data:

If the company reduces its price to $7.50, it believes that the volume will go up to 11,000 units.

How would this change affect operating income?

A) It will go up by $2,500.

B) It will go up by $9,000.

C) It will go down by $2,500.

D) It will go down by $9,000.

Transcribed Image Text:

Price Variable cost Fixed cost Volume $8.00 $5.00 $21,000 10,000 per unit per unit per month per month Price Variable cost Fixed cost Volume $8.00 $5.00 $21,000 10,000 per unit per unit per month per month

Answer rating: 100% (QA)

C It will go down by 2500 Explanatio... View the full answer