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XYZ company is studying the profitability of a change in operation and has gathered the...

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Accounting

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XYZ company is studying the profitability of a change in operation and has gathered the following information. Current Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost: $10, and Sales (Units): 12,000. Anticipated Operation: Fixed Costs: $48,000, Selling Price: $22, Variable Cost: $12, and Sales (Units): 6,000. Should XYZ company make the change? Select one: a. No, because the company will be worse off by $22,000. b. Yes, the company will be better off by $6,000 c. No, because the company will be worse off by $4,000, d. It is impossible to judge because additional information is needed e. No, because sales will drop by 6,000 units 1 XYZ Company uses the high low method to analyze the mixed cost. According to the cost formula derived, the total fixed cost is $10,000. Total cost at the high level of activity was $61,000 and at the low level of activity was $25,000. If the low level of activity was 2,500 units, what was the high level of activity in units? tof Select one: a. 6,100 b. 8,500 C. 9,500 d. 9,000 e. None of the answers given

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