Answer the Following Questions Using the Information Below:
LeBlanc Lighting

Answer the following questions using the information below:
LeBlanc Lighting manufactures table lamps and is considering raising the price by $15 a unit for the coming year.With a $15 price increase,demand is expected to fall by 2500 units.
$$\begin{array} { l r r } & \text { Current } & \text { Projected } \\ \text { Demand }& 20000 \text { urits } & 17500 \text { urits } \\\text { Selling price }& \$ 150 & \$ 165 \\\text { Variable costs per unit } & \$ 100 & \$ 100\end{array}$$

-Would you recommend the $15 price increase?

A) No,because demand decreased.
B) Yes,because contribution margin per unit increases.
C) No,because the selling price increases.
D) Yes,because operating profit increases.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free