Attal Corporation manufactures numerous products,one of which is called Epsilon05.The company has provided the following data about this product:
Assume that the total traceable fixed expense does not change.If Attal increases the price of Epsilon05 to $75.60,what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $72.00? (Your answer should be rounded to the nearest 0.1%.)
A) -11.0%
B) -10.0%
C) -19.2%
D) -9.2%

Question

Attal Corporation manufactures numerous products,one of which is called Epsilon05.The company has provided the following data about this product:
 Assume that the total traceable fixed expense does not change.If Attal increases the price of Epsilon05 to $75.60,what percentage change in unit sales would provide the same net operating income as is currently being earned at a price of $72.00? (Your answer should be rounded to the nearest 0.1%.)
A) -11.0% 
B) -10.0% 
C) -19.2% 
D) -9.2%

Quizplus · Accepted Answer

Profit = (P - V) × Q - Fixed expenses
$240,000 = ($75.60 per unit - $43.00 per unit) × Q - $2,370,000
$2,610,000 = ($75.60 per unit - $43.00 per unit) × Q
$2,610,000 = ($32.60 per unit) × Q
Q = $2,610,000 ÷ $32.60 per unit = 80,062 units (rounded up)
Percentage change in unit sales = (80,062 units − 90,000 units) ÷ 90,000 units = -11.0% (rounded)

Attal Corporation Manufactures Numerous Products,one of Which Is Called Epsilon05