Arlo Company makes bulk quantities of cleaning fluids. They currently sell 1,000 containers a month at a price of $22 per unit. If they added a disinfectant, they could charge $25 per unit for the improved product. It would cost them a total of $3,800 per month to make that alteration. If so, what would be the effect on operational income?

Question

Quizplus · Accepted Answer

D) Calculations:
(1,000 × $25) - (1,000 × $22) = $3,000
$3,000 - $3,800 = ($800)

Arlo Company Makes Bulk Quantities of Cleaning Fluids