Maccarone Corporation Manufactures Numerous Products, One of Which Is Called

question 84

Essay

Maccarone Corporation manufactures numerous products, one of which is called Tau10. 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 Tau10?
b. Management is considering decreasing the price of Tau10 by 5%, from $36.00 to $34.20. The company's marketing managers estimate that this price reduction would increase unit sales by 10%, from 130,000 units to 143,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will Tau10 earn at a price of $34.20 if this sales forecast is correct?
c. Assuming that the total traceable fixed expense does not change, if Maccarone decreases the price of Tau10 to $34.20, what percentage change in unit sales would provide the same net operating income that it currently earns at a price of $36.00? (Round your answer to the nearest one-tenth of a percent.)

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Definitions:

Permanent Internet

The concept that connectivity and online access are continuous and unending in modern society.

Identification

encompasses the process of recognizing or establishing the identity of a person or thing, often used in research to distinguish subjects or variables.

Relevant Information

Information that is significant to the decision-making process, directly impacting the outcome or result.

Communication Research

The examination of the ways in which individuals create meanings through the use of messages in different contexts, through various channels, and across multiple media.