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Claire Corporation's Contribution Margin Income Statement for March Is as Follows

Question 38

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Claire Corporation's contribution margin income statement for March is as follows:
Claire Corporation's contribution margin income statement for March is as follows:   Claire's manager has proposed that the unit selling price be increased by 10% for the month of April. The manager believes that the selling price increase will result in a 250 unit decrease in sales during April. Should the manager's proposal be accepted? A)  Yes, because operating income will increase $6,750. B)  No, because contribution margin will decrease $3,375. C)  No, because operating income will decrease $1,875. D)  Yes, because contribution margin will increase $10,125. Claire's manager has proposed that the unit selling price be increased by 10% for the month of April. The manager believes that the selling price increase will result in a 250 unit decrease in sales during April. Should the manager's proposal be accepted?


A) Yes, because operating income will increase $6,750.
B) No, because contribution margin will decrease $3,375.
C) No, because operating income will decrease $1,875.
D) Yes, because contribution margin will increase $10,125.

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