change. What would happen to the company's profit if the changes were implemented, and production decreased to 45,000 units?
change. What would happen to the company's profit if the changes were implemented, and production decreased to 45,000 units?
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 9EB: Baghdad Company produces a single product. They have recently received the result of a market survey...
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Transcribed Image Text:XYZ Company is facing changes in its cost structure so that fixed costs will decrease from $600,000 to
$500,000, but variable costs will increase from $12 per unit to $14 per unit. If it were to implement these
changes at its current production level of 50,000 units (with no change to selling price), profit would not
change. What would happen to the company's profit if the changes were implemented, and production
decreased to 45,000 units?
O a.
It will stay the same.
O b. It will decrease.
O c.
none of the given answers
O d. It will increase.
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