A Company Has Provided the Following Data If the Sales Volume Decreases by 25%,the Variable Cost Per

A company has provided the following data:
$\begin{array}{|l|r|}\hline \text { Sales } & 3,000 \text { units } \\\hline \text { Sales price } & \$ 70 \text { per unit } \\\hline \text { Variable cost } & \$ 50 \text { per unit } \\\hline \text { Fixed cost } & \$ 25,000 \\\hline\end{array}$
If the sales volume decreases by 25%,the variable cost per unit increases by 15%,and all other factors remain the same,what will the outcome be for operating income?

A) Decrease by $31,875.
B) Decrease by $15,000.
C) Increase by $20,625.
D) Decrease by $3,125.

Correct Answer:

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