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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. Anticipated Operation: Fixed Costs: $38,000, Selling Price: $16, Variable Cost: $10, and Sales (Units): 9,000. Current 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 sales will drop by 3,000 units. b. No, because the company will be worse off by $4,000, c. It is impossible to judge because additional information is needed. d. Yes, the company will be better off by $4,000, e. No, because the company will be worse off by $22,000. Assume that sales are predicted to be $18,750, the expected contribution margin is $7,500, and a net loss of $1,250 is anticipated. The break-even point in sales ($) is: Select one: a. 15,625 b. 14,583 c. 10,417 d. 21,875 e. 20,000

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