Answer:
the company's information is missing, so I looked for similar questions:
- budgeted sales $1,000,000
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units sold 10,000
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unit price $100
- total cost per unit $60
currently (without any changes), the company's profit is:
$1,000,000 - (10,000 x $60) = $400,000
if sales price is reduced to $100 x (1 - 10%) = $90
total units sold will increase to 10,000 x (1 + 25%) = 12,500
new operating income = (12,500 x $90) - (12,500 x $60) - $30,000 = $345,000
operating income will decease by $400,000 - $345,000 = $55,000
