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Question -
A company has provided the following data:
Sales 50,000 units
Sales price $100 per unit
Variable cost $70 per unit
Fixed cost $30,000
If the dollar contribution margin per unit is increased by 15%, total fixed cost is decreased by 25%, and all other factors remain the same, what will the outcome be for operating income?
a. Decrease by $50,000.
b. Increase by $3,500.
c. Increase by $232,500.
d. Increase by $200,000.
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