Starowicz Corporation Manufactures Numerous Products, One of Which Is Called

question 68

Multiple Choice

Starowicz Corporation manufactures numerous products, one of which is called Beta10. The company has provided the following data about this product: Management is considering decreasing the price of Beta10 by 7%, from $12.00 to $11.16. The company's marketing managers estimate that this price reduction would increase unit sales by 15%, from 120,000 units to 138,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta-10 earn at a price of $11.16 if this sales forecast is correct?

• A) −$40,800
• B) $16,080
• C) $379,200
• D) $436,080

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Definitions:

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