Question

A company has provided the following data:

Sales		4,200	Units
Sales price	$	60	per unit
Variable cost	$	40	per unit
Fixed cost	$	31,000

If the sales volume decreases by 30%, the variable cost per unit increases by 20%, and all other factors remain the same, operating profit will:

decrease by $48,720.

decrease by $16,800.

increase by $26,880.

decrease by $4,280.

Answer 1