Wright Corporation's Contribution Format Income Statement for Last Month Appears

Wright Corporation's contribution format income statement for last month appears below:
$\begin{array} {| l | r | } \hline \text { Sales } & \$ 45,000 \\\hline \text { Less: variable expenses } & \underline { 27,000 } \\\hline \text { Contribution margin } & 18,000 \\\hline \text { Less: fixed expenses } & \underline { 12,000 } \\\hline \text { Operating income } & \$ 6,000 \\\hline\end{array}$ There were no beginning or ending inventories. The company produced and sold 3,000 units during the month


-If sales decrease by 500 units in the next month,by how much would fixed expenses have to be reduced to maintain the current operating income?

A) $7,500.
B) $6,000.
C) $2,000.
D) $3,000.

Correct Answer:

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