Question: A company is debating whether to change its cost structure so that fixed costs increase from $300,000 to $400,000, but variable costs decrease from $5

A company is debating whether to change its cost structure so that fixed costs increase from $300,000 to $400,000, but variable costs decrease from $5 per unit to $4 per unit. If it were to implement the change at its current production level of 100,000, profit would not change. What would happen to the company's profit if the change were implemented and production increased to 125,000?

It will stay the same.

It will increase.

It will decrease.

It could increase or decrease.

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