Chapter 20, Problem 27E

Please explain the solution to this general accounting problem using the correct accounting principles.

What is the amount of the September collections?

Johnson Manufacturing makes a single product. The company has monthly fixed costs totaling $180,000 and variable costs of $19 per unit. Each unit of product is sold for $35. Johnson expects to sell 21,000 units each month. What would be the operating profit if the total fixed costs decrease by 25%?