Flash City Inc. manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. With a 75-cent price increase, demand is expected to fall by 7,000 units. Current Projected Demand 78,000 units 71,000 units Selling price $9.00 $9.75 Incremental cost per unit $6.80 $6.80 Would you recommend the 75-cent price increase

Yes, reason been that operating profits increase

Explanation:

Calculation to determine whether

Incremental analysis you would recommend the 75-cent price

CurrentProjected

Incremental revenue$702,000$692,250

(78,000 units*$9.00=$702,000)

(71,000*$9.75=$692,250)

Incremental cost-$537,200-$482,800

(78,000 units*$6.80=$537,200)

(71,000*$6.80=$482,800)

Incremental Profit (loss)$164,800$209,450

($702,000-537,200)

($692,250-$482,800)

Profit increase by($209,450 -$164,800)

Profit increase by= $44,650

Based on the above calculation I would recommend the 75-cent price increase reason been that operating profits increase.

pretty sure c

explanation:

um sure