If sales decrease by 500 units by next month, by how much would fixed expenses have to be reduced to maintain the current net income?

A) $2,000.
B) $7,500.
C) $3,000.
D) $6,000.

Fixed Expenses

Costs that do not change with the level of production or sales volume, such as rent and salaries.

Variable Expenses

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.