Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided...
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Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product: Unit sales (a) 88,000 Selling price per unit $ 85.00 Variable cost per unit $ 68.00 Traceable fixed expense $ 1,477,000 Management is considering increasing the price of Alpha-32 by 8%, from $85.00 to $91.80. The companys marketing managers estimate that this price hike would decrease unit sales by 8%, from 88,000 units to 80,960 units.Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $91.80 if this sales forecast is correct?
Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product:
Unit sales (a) 88,000
Selling price per unit $ 85.00
Variable cost per unit $ 68.00
Traceable fixed expense $ 1,477,000
Management is considering increasing the price of Alpha-32 by 8%, from $85.00 to $91.80. The companys marketing managers estimate that this price hike would decrease unit sales by 8%, from 88,000 units to 80,960 units.Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $91.80 if this sales forecast is correct?
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