Spach Corporation manufactures numerous products, one of which is called Beta-68. 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 Beta-68 would Spach need to sell at a price of $15.20 to earn the same net operating income that it currently earns at a price of $16.00? (Round your answer up to the nearest whole number.)
A) 126,924
B) 111,538
C) 96,667
D) 121,000

Question

Spach Corporation manufactures numerous products, one of which is called Beta-68. 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 Beta-68 would Spach need to sell at a price of $15.20 to earn the same net operating income that it currently earns at a price of $16.00? (Round your answer up to the nearest whole number.)
A) 126,924 
B) 111,538 
C) 96,667 
D) 121,000

Quizplus · Accepted Answer

Profit = (P − V) × Q − Fixed expenses
$80,000 = ($15.20 per unit − $10.00 per unit) × Q − $580,000
$660,000 = ($15.20 per unit − $10.00 per unit) × Q
$660,000 = ($5.20 per unit) × Q
Q = $660,000 ÷ $5.20 per unit = 126,924 units (rounded up)

Spach Corporation Manufactures Numerous Products, One of Which Is Called