Samsuni makes wireless earbuds. The prior-year, unit selling price for a set of earbuds was $100 with a unit variable cost of $40 and a unit fixed cost of $10 based on production and sales of 5,000 sets. For the current year, Samsuni is planning to increase the unit selling price to $105 since the unit variable cost increased by 20% and the total fixed cost also increased by 10%. Assume that at the higher selling price, the company feels that unit sales may decrease to 4,500 sets. What operating income will Samsuni expect to recognize for the current year?

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The Answer of Samsuni makes wireless earbuds. The prior-year, unit selling price for a set of earbuds was $100 with a unit variable cost of $40 and a unit fixed cost of $10 based on production and sales of 5,000 sets. For the current year, Samsuni is planning to increase the unit selling price to $105 since the unit variable cost increased by 20% and the total fixed cost also increased by 10%. Assume that at the higher selling price, the company feels that unit sales may decrease to 4,500 sets. What operating income will Samsuni expect to recognize for the current year?

Samsuni Makes Wireless Earbuds