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You Have Been Provided with the Following Information If Unit Sales Decrease by 10%,how Much Will Fixed Costs

Question 37

Multiple Choice

You have been provided with the following information:
 Per Unit  Total  Sales $15$45,000 Less variable expenses 927,000 Contribution margin 618,000 Less fixed expenses 12,000 Operating profit $6,000\begin{array} { | l | r | r | } \hline&\text { Per Unit } & \text { Total }\\\hline \text { Sales } & \$ 15 & \$ 45,000 \\\hline \text { Less variable expenses } & \underline{ 9 }& \underline{27,000} \\\hline \text { Contribution margin } &6 & 18,000\\\hline \text { Less fixed expenses } & & \underline{12,000 } \\\hline \text { Operating profit } & &\$6,000\\\hline\end{array}
If unit sales decrease by 10%,how much will fixed costs have to be reduced by to maintain the current operating profit?


A) $12,000.
B) $4,500.
C) $6,000.
D) $1,800.

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