If the price increase is implemented, operating profit is projected to ________

Contrafic Lighting manufactures small flashlights 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 75,000 units 68,000 units
Selling price $8.50 $9.25
Incremental cost per unit $4.80 $4.80

A) increase by $25,100
B) decrease by $5,250
C) increase by $5,250
D) decrease by $7,000

Answer: A