1. Guble Manufacturing produces a single product that sells for $70. Variable costs per unit equal $45. Thecompany expects total fixed costs to be $52,000 for the next month at the projected sales level of 2,500units. In an attempt to improve performance, management is considering an alternative action. Supposethat management believes that a 10% reduction in the selling price will result in a 10% increase in unitssold. If this proposed reduction in selling price is implemented ________.
(A) operating income will decrease by $10,500
(B) operating income will increase by $11,500
(C) operating income will decrease by $13,000
(D) operating income will increase by $22,000