Spach Corporation manufactures numerous products, one of which is called Beta68. The company has provided the following data about this product: Management is considering decreasing the price of Beta68 by 5%, from $16.00 to $15.20. The company's marketing managers estimate that this price reduction would increase unit sales by 10%, from 110,000 units to 121,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta68 earn at a price of $15.20 if this sales forecast is correct?
A) $629,200
B) $572,000
C) ($8,000)
D) $49,200

Question

Spach Corporation manufactures numerous products, one of which is called Beta68. The company has provided the following data about this product:  Management is considering decreasing the price of Beta68 by 5%, from $16.00 to $15.20. The company's marketing managers estimate that this price reduction would increase unit sales by 10%, from 110,000 units to 121,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta68 earn at a price of $15.20 if this sales forecast is correct?
A) $629,200 
B) $572,000 
C) ($8,000) 
D) $49,200

Quizplus · Accepted Answer

The Answer of Spach Corporation manufactures numerous products, one of which is called Beta68. The company has provided the following data about this product:  Management is considering decreasing the price of Beta68 by 5%, from $16.00 to $15.20. The company's marketing managers estimate that this price reduction would increase unit sales by 10%, from 110,000 units to 121,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta68 earn at a price of $15.20 if this sales forecast is correct?
A) $629,200 
B) $572,000 
C) ($8,000) 
D) $49,200

Spach Corporation Manufactures Numerous Products, One of Which Is Called