Revised Profit Calculation After Price and Volume Changes Steps:

• New selling price = $10 × 0.9 =$9 per unit (10% reduction).
• New sales volume = 10,000 × 1.05 = 10,500 units.
• New revenue = $9 × 10,500 =$94,500; new variable costs = $5 × 10,500 =$52,500.
• New profit = $94,500 -$52,500 - $25,000 =$17,000. Why B is correct:
• It applies the contribution margin formula: (new price - variable cost per unit) × new volume - fixed costs = profit. Why the others are wrong:
• A: Underestimates revenue by using a larger price cut without full volume adjustment.
• C: Overestimates by ignoring the price reduction's impact on contribution per unit.
• D: Likely uses original figures without any changes.

Final answer: B