Answer
This question involves determining the impact of change in two variables (i.e., Fixed Costs and Number of Units Sold). It is important to remember that only variable costs and revenues change in-line with the change in units sold and fixed costs do not change up to a certain level.
Work Step by Step
(W-1) : [units 5,000,000 × 1.10] × [USD 0.5 per unit] = USD 2,750,000
(W-2) : [units 5,000,000 × 1.10] × [USD 0.3 per unit] = USD 1,650,000
(W-2) : USD 900,000 × 1.10 = USD 990,000
