Duo, Inc, Carries Two Products and Has the Following Year-End Income

Multiple Choice

Duo, Inc., carries two products and has the following year-end income statement (000s omitted) : If products AR-10 and ZR-7 are substitutes for each other, a sales mix and sales volume variation for the combined products can be calculated. If this combination is calculated, the net effect on profit of the change in the unit sales mix is: (Round intermediate calculations to five significant digits, and your final answer to the nearest whole dollar amount.)

A) $480 favorable.
B) $700 favorable.
C) $560 favorable.
D) $940 favorable.
E) $1,960 favorable.