Kopec Corporation manufactures numerous products, one of which is called Delta42. The company has provided the following data about this product: Assume that the total traceable fixed expense does not change. How many units of product Delta42 would Kopec need to sell at a price of $60.50 to earn the same net operating income that it currently earns at a price of $55.00? (Round your answer up to the nearest whole number.)

Question

Kopec Corporation manufactures numerous products, one of which is called Delta42. The company has provided the following data about this product:  Assume that the total traceable fixed expense does not change. How many units of product Delta42 would Kopec need to sell at a price of $60.50 to earn the same net operating income that it currently earns at a price of $55.00? (Round your answer up to the nearest whole number.)

Quizplus · Accepted Answer

Profit at the current price:
 11eacbfc_c830_58a6_8ffe_6384a742a614_TB7552_00 Profit = (P − V) × Q − Fixed expenses
$320,000 = ($60.50 per unit − $34.00 per unit) × Q − $3,250,000
$3,570,000 = ($60.50 per unit − $34.00 per unit) × Q
$3,570,000 = ($26.50 per unit) × Q
Q = $3,570,000 ÷ $26.50 per unit = 134,717 units (rounded up)

Kopec Corporation Manufactures Numerous Products, One of Which Is Called