Algood Corporation manufactures numerous products,one of which is called Omicron09.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 Omicron09?
b.Management is considering decreasing the price of Omicron09 by 5%,from $19.00 to $18.05.The company's marketing managers estimate that this price reduction would increase unit sales by 15%,from 100,000 units to 115,000 units.Assuming that the total traceable fixed expense does not change,what net operating income will Omicron09 earn at a price of $18.05 if this sales forecast is correct?
c.Assuming that the total traceable fixed expense does not change,how many units of Omicron09 would Algood need to sell at a price of $18.05 to earn the same net operating income that it currently earns at a price of $19.00? (Round your answer up to the nearest whole number.)

Question

Algood Corporation manufactures numerous products,one of which is called Omicron09.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 Omicron09?
b.Management is considering decreasing the price of Omicron09 by 5%,from $19.00 to $18.05.The company's marketing managers estimate that this price reduction would increase unit sales by 15%,from 100,000 units to 115,000 units.Assuming that the total traceable fixed expense does not change,what net operating income will Omicron09 earn at a price of $18.05 if this sales forecast is correct?
c.Assuming that the total traceable fixed expense does not change,how many units of Omicron09 would Algood need to sell at a price of $18.05 to earn the same net operating income that it currently earns at a price of $19.00? (Round your answer up to the nearest whole number.)

Quizplus · Accepted Answer

The Answer of Algood Corporation manufactures numerous products,one of which is called Omicron09.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 Omicron09?
b.Management is considering decreasing the price of Omicron09 by 5%,from $19.00 to $18.05.The company's marketing managers estimate that this price reduction would increase unit sales by 15%,from 100,000 units to 115,000 units.Assuming that the total traceable fixed expense does not change,what net operating income will Omicron09 earn at a price of $18.05 if this sales forecast is correct?
c.Assuming that the total traceable fixed expense does not change,how many units of Omicron09 would Algood need to sell at a price of $18.05 to earn the same net operating income that it currently earns at a price of $19.00? (Round your answer up to the nearest whole number.)

Algood Corporation Manufactures Numerous Products,one of Which Is Called Omicron09