Holger Incorporated, which produces and sells a single product, has provided the following
data:
Sales
2,000 units
Selling price
$60 per unit
Variable expense
$40 per unit
Fixed expense
$20,000
Consider each of the following questions independently.
If the sales volume decreases by 25% and the variable expense per unit increases by 15%, net operating income is expected to:
A) decrease by $19,000
B) decrease by $1,000
C) increase by $1,750
D) decrease by $15,000