Lincoln, Inc Projected Sales Are 7,500 Units Per Year

question 141

Essay

Lincoln, Inc. is considering the introduction of a new music player with the following price and cost characteristics:
$$\begin{array} { l c } \text { Sales price } & \$ 125 \text { each } \\\text { Variable costs } & 75 \text { each } \\\text { Fixed costs } & 180,000 \text { per year }\end{array}$$
Projected sales are 7,500 units per year.
Required:
(consider each question independent of each other):
(a) What will the operating profit be?
(b) What is the impact on operating profit if the selling price per unit decreases by 15%?
(c) What is the net income if variable costs per unit increase by 15% and Lincoln has a 38% tax rate?

---

Definitions:

Authentic Leader

A leadership style characterized by genuine, transparent, and ethical behavior, where leaders are true to themselves and work towards fostering trust among their followers.

Empowering Leaders

Leaders who encourage and enable employees to take initiative, make decisions, and assume higher levels of responsibility.

Leadership Style

The manner and approach of providing direction, implementing plans, and motivating people.

Meaning

The significance, purpose, or understanding attributed to an event, object, or concept, often influencing individuals' perceptions and actions.