A. This answer results from reducing Product 1's quantity by 10% instead of 20% and from not changing the price for Product 1.

B. This answer results from not calculating the reduced sales of Product 2. The problem states that Product 2 is a complement of Product 1, and that the sales volume of Item 2 relative to the sales volume of Item 1 is fairly constant. Therefore, if the quantity sold of Product 1 decreases, the quantity sold of Product 2 will decrease by a proportionately equal amount.

C. To solve this, work out a revised budgeted revenue figure, compare it with the original budgeted revenue as given in the problem, and the difference is the answer, as follows:

Product           Quantity         Price          Revenue

1           (200,000 * .80)   ($50 * 1.1)    $ 8,800,000

2           (150,000 * .80)      $10          1,200,000

3           (300,000 * 1.05)     $30         9,450,000

                                                $19,450,000

                             Original Revenue:  20,500,000

                                     Decrease:$  1,050,000

D. This answer is incorrect. See the correct answer for an explanation.