Algood Corporation Manufactures Numerous Products, One of Which Is Called

question 83

Essay

Algood Corporation manufactures numerous products, one of which is called Omicron09. The company has provided the following data about this product:
Required:a. What net operating income is the company earning now on its sales of Omicron09?
b. Management is considering decreasing the price of Omicron09 by 5%, from $19.00 to $18.05. The company's marketing managers estimate that this price reduction would increase unit sales by 15%, from 100,000 units to 115,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will Omicron09 earn at a price of $18.05 if this sales forecast is correct?
c. Assuming that the total traceable fixed expense does not change, how many units of Omicron09 would Algood need to sell at a price of $18.05 to earn the same net operating income that it currently earns at a price of $19.00? (Round your answer up to the nearest whole number.)

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Definitions:

Myocardial Infarction

A medical term for a heart attack, resulting from the blockage of blood flow to a part of the heart, causing heart cells to die due to lack of oxygen.

Resistance Stage

A phase of the general adaptation syndrome in which the body tries to adapt to a stressor and maintain homeostasis, following the initial alarm reaction stage.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that describes the body's short- and long-term reactions to stress.

Physical Assessment

A comprehensive examination of a patient's body to detect any signs of disease or abnormalities, often using observation, palpation, percussion, and auscultation.