Acri Corporation manufactures numerous products, one of which is called Omicron09. The company has provided the following data about this product: Assume that the total traceable fixed expense does not change. If Acri decreases the price of Omicron09 to $71.76, what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $78.00? (Your answer should be rounded to the nearest 0.1%.)

Question

Acri Corporation manufactures numerous products, one of which is called Omicron09. The company has provided the following data about this product:  Assume that the total traceable fixed expense does not change. If Acri decreases the price of Omicron09 to $71.76, what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $78.00? (Your answer should be rounded to the nearest 0.1%.)

Quizplus · Accepted Answer

Profit = (P − V) × Q − Fixed expenses
$420,000 = ($71.76 per unit − $49.00 per unit) × Q − $2,480,000
$2,900,000 = ($71.76 per unit − $49.00 per unit) × Q
$2,900,000 = ($22.76 per unit) × Q
Q = $2,900,000 ÷ $22.76 per unit = 127,417 units (rounded up)
Percentage change in unit sales = (127,417 units − 100,000 units) ÷ 100,000 units = 27.4% (rounded)

Acri Corporation Manufactures Numerous Products, One of Which Is Called