Grime-X Is Studying the Profitability of a Change in Operation

Multiple Choice

Grime-X is studying the profitability of a change in operation and has gathered the following information: $\begin{array}{lrr}&\text { Current } & \text { Anticipated } \\&\text { Operation } & \text { Operation }\\\text { Fixed costs } & \$ 38,000 & \$ 48,000 \\\text { Selling price } & \$ 16 & \$ 22 \\\text { Variable cost } & \$ 10 & \$ 12 \\\text { Sales (units) } & 9,000 & 6,000\end{array}$ Should Grime-X make the change?

A) Yes, the company will be better off by $6,000.
B) No, because sales will drop by 3,000 units.
C) No, because the company will be worse off by $4,000.
D) No, because the company will be worse off by $22,000.
E) It is impossible to judge because additional information is needed.