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What the company will experience

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Problem 1: Morgan Technologies sells a single product at $25 per unit. The firm's most recent income statement revealed unit sales of 94,000, variable costs of $752,000, and fixed costs of $510,000. If a $5 drop in selling price will boost unit sales volume by 20%, the company will experience:

Option 1: no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume.

Option 2: an $69,280 drop in profit.

Option 3: a $244,400 drop in profit.

Option 4: a $510,000 drop in profit.

Option 5: None of the answers is correct.

Reference no: EM133001123

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