Inscho Corporation manufactures numerous products, one of which is called Delta10. The company has provided the following data about this product: Assume that the total traceable fixed expense does not change. How many units of product Delta10 would Inscho need to sell at a price of $90.95 to earn the same net operating income that it currently earns at a price of $85.00? (Round your answer up to the nearest whole number.)
A) 125,938
B) 126,000
C) 118,051
D) 106,192

Question

Inscho Corporation manufactures numerous products, one of which is called Delta10. The company has provided the following data about this product:  Assume that the total traceable fixed expense does not change. How many units of product Delta10 would Inscho need to sell at a price of $90.95 to earn the same net operating income that it currently earns at a price of $85.00? (Round your answer up to the nearest whole number.)
A) 125,938 
B) 126,000 
C) 118,051 
D) 106,192

Quizplus · Accepted Answer

Profit = (P − V) × Q − Fixed expenses
$450,000 = ($90.95 per unit − $53.00 per unit) × Q − $4,030,000
$4,480,000 = ($90.95 per unit − $53.00 per unit) × Q
$4,480,000 = ($37.95 per unit) × Q
Q = $4,480,000 ÷ $37.95 per unit = 118,051 units (rounded up)

Inscho Corporation Manufactures Numerous Products, One of Which Is Called