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Jarvis Foods produces a gourmet condiment which sells for $10.00 per unit. Variable costs are...

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Accounting

Jarvis Foods produces a gourmet condiment which sells for $10.00 per unit. Variable costs are $7.50 per unit, and fixed costs are $18,000 per month. Jarvis is currently selling 8,000 units per month. If Jarvis reduces the selling price down to $9.00 per unit, they believe volume will rise to 13,000 units per month. How would that affect its operating income? Operating income will go up by $6,000. Operating income will go down by $1,600. Operating income will go down by $500. Operating income will go up by $2,000.

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