Saulsberry Corporation manufactures numerous products,one of which is called Beta70.The company has provided the following data about this product:
Required:
a.What net operating income is the company earning now on its sales of Beta70?
b.Management is considering increasing the price of Beta70 by 10%,from $60.00 to $66.00.The company's marketing managers estimate that this price hike would decrease unit sales by 15%,from 90,000 units to 76,500 units.Assuming that the total traceable fixed expense does not change,what net operating income will Beta70 earn at a price of $66.00 if this sales forecast is correct?
c.Assuming that the total traceable fixed expense does not change,how many units of Beta70 would Saulsberry need to sell at a price of $66.00 to earn the same net operating income that it currently earns at a price of $60.00? (Round your answer up to the nearest whole number.)

Question

Saulsberry Corporation manufactures numerous products,one of which is called Beta70.The company has provided the following data about this product:
  Required:
a.What net operating income is the company earning now on its sales of Beta70?
b.Management is considering increasing the price of Beta70 by 10%,from $60.00 to $66.00.The company's marketing managers estimate that this price hike would decrease unit sales by 15%,from 90,000 units to 76,500 units.Assuming that the total traceable fixed expense does not change,what net operating income will Beta70 earn at a price of $66.00 if this sales forecast is correct?
c.Assuming that the total traceable fixed expense does not change,how many units of Beta70 would Saulsberry need to sell at a price of $66.00 to earn the same net operating income that it currently earns at a price of $60.00? (Round your answer up to the nearest whole number.)

Quizplus · Accepted Answer

The Answer of Saulsberry Corporation manufactures numerous products,one of which is called Beta70.The company has provided the following data about this product:
  Required:
a.What net operating income is the company earning now on its sales of Beta70?
b.Management is considering increasing the price of Beta70 by 10%,from $60.00 to $66.00.The company's marketing managers estimate that this price hike would decrease unit sales by 15%,from 90,000 units to 76,500 units.Assuming that the total traceable fixed expense does not change,what net operating income will Beta70 earn at a price of $66.00 if this sales forecast is correct?
c.Assuming that the total traceable fixed expense does not change,how many units of Beta70 would Saulsberry need to sell at a price of $66.00 to earn the same net operating income that it currently earns at a price of $60.00? (Round your answer up to the nearest whole number.)

Saulsberry Corporation Manufactures Numerous Products,one of Which Is Called Beta70