Yashinski Corporation Manufactures Numerous Products, One of Which Is Called

question 43

Essay

Yashinski Corporation manufactures numerous products, one of which is called Alpha46. The company has provided the following data about this product:
Required:
a. Management is considering increasing the price of Alpha46 by 15%, from $45.00 to $51.75. The company's marketing managers estimate that this price hike would decrease unit sales by 25%, from 110,000 units to 82,500 units. Assuming that the total traceable fixed expense does not change, what net operating income will Alpha46 earn at a price of $51.75 if this sales forecast is correct?
b. Assuming that the total traceable fixed expense does not change, how many units of Alpha46 would Yashinski need to sell at a price of $51.75 to earn the same net operating income that it currently earns at a price of $45.00? (Round your answer up to the nearest whole number.)

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Definitions:

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