Smith Company Reported the Following Results from Sales of 5,000

Multiple Choice

Smith Company reported the following results from sales of 5,000 units of Product A for June: $\begin{array}{ll}\text { Sales } & \$ 200,000 \\\text { Variable costs } & ({120,000}) \\\text { Fixed costs } & (\underline{60,000}) \\\text { Operating income } & \underline{\$ 20,000}\end{array}$ Assume that Smith increases the selling price of Product A by 10 percent in July.How many units of Product A would have to be sold in July to generate an operating income of $20,000?

A) 4,000
B) 4,300
C) 4,545
D) 5,000