Boggess Corporation manufactures numerous products, one of which is called Alpha41. The company has provided the following data about this product: Management is considering increasing the price of Alpha41 by 10%, from $86.00 to $94.60. The company's marketing managers estimate that this price hike would decrease unit sales by 20%, from 120,000 units to 96,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha41 earn at a price of $94.60 if this sales forecast is correct?
A) $459,600
B) $4,512,000
C) $3,609,600
D) $1,362,00

Question

Boggess Corporation manufactures numerous products, one of which is called Alpha41. The company has provided the following data about this product:  Management is considering increasing the price of Alpha41 by 10%, from $86.00 to $94.60. The company's marketing managers estimate that this price hike would decrease unit sales by 20%, from 120,000 units to 96,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha41 earn at a price of $94.60 if this sales forecast is correct?
A) $459,600 
B) $4,512,000 
C) $3,609,600 
D) $1,362,00

Quizplus · Accepted Answer

The Answer of Boggess Corporation manufactures numerous products, one of which is called Alpha41. The company has provided the following data about this product:  Management is considering increasing the price of Alpha41 by 10%, from $86.00 to $94.60. The company's marketing managers estimate that this price hike would decrease unit sales by 20%, from 120,000 units to 96,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha41 earn at a price of $94.60 if this sales forecast is correct?
A) $459,600 
B) $4,512,000 
C) $3,609,600 
D) $1,362,00

Boggess Corporation Manufactures Numerous Products, One of Which Is Called