Loren Company's single product has a selling price of $15 per unit.Last year the company reported total variable expenses of $180,000,fixed expenses of $90,000,and a net operating income of $30,000.A study by the sales manager discloses that a 15% increase in the selling price would reduce unit sales by 10%.If her proposal is adopted,net operating income would:

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Profit = (Sales - Variable expenses)- Fixed expenses
$30,000 = ($15 per unit F1F1F1S1F1F1F10 Unit sales - $180,000)- $90,000
($15 per unit F1F1F1S1F1F1F10 Unit sales - $180,000)= $30,000 + $90,000
$15 per unit F1F1F1S1F1F1F10 Unit sales = $30,000 + $90,000 + $180,000
$15 per unit F1F1F1S1F1F1F10 Unit sales = $300,000
Unit sales = $300,000 F1F1F1S1F1F1F10 $15 per unit = 20,000 units
Variable expense per unit = Variable expenses F1F1F1S1F1F1F10 Unit sales
= $180,000 F1F1F1S1F1F1F10 20,000 units = $9 per unit
New selling price = (1.00 + 0.15)F1F1F1S1F1F1F10 $15 per unit = $17.25 per unit
New unit sales = (1.00 - 0.10)F1F1F1S1F1F1F10 20,000 units = 18,000 units
Profit = (P - V)F1F1F1S1F1F1F10 Q - Fixed expenses
New profit = ($17.25 per unit - $9.00 per unit)F1F1F1S1F1F1F10 18,000 units - $90,000
= ($8.25 per unit F1F1F1S1F1F1F10 18,000 units)- $90,000
= $148,500 - $90,000
= $58,500
Increase in profit = $58,500 - $30,000 = $28,500

Loren Company's Single Product Has a Selling Price of $15