Thomas Company buys and sells a product that has a variable cost per unit of $14. Thomas' fixed costs amount to $66,000. The product sells for $18 each. Thomas currently expects to make and sell 23,000 units. Management believes that if the price per unit is lowered by one dollar, the Company could sell an additional 3,000 units of product. If Thomas Implements the lower price strategy, profitability will Multiple Choice O O O increase by $5,600. decrease by $3,000. decrease by $14,000. increase by $17,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Thomas Company buys and sells a product that has a variable cost per unit of $14. Thomas' fixed costs amount to $66,000. The product sells for $18 each. Thomas currently expects to make and sell 23,000 units. Management believes that if the price per unit is
lowered by one dollar, the Company could sell an additional 3,000 units of product. If Thomas implements the lower price strategy, profitability will
Multiple Choice
O
increase by $5,600.
decrease by $3,000.
decrease by $14,000.
increase by $17,000.
Transcribed Image Text:Thomas Company buys and sells a product that has a variable cost per unit of $14. Thomas' fixed costs amount to $66,000. The product sells for $18 each. Thomas currently expects to make and sell 23,000 units. Management believes that if the price per unit is lowered by one dollar, the Company could sell an additional 3,000 units of product. If Thomas implements the lower price strategy, profitability will Multiple Choice O increase by $5,600. decrease by $3,000. decrease by $14,000. increase by $17,000.
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