Ohanlon Corporation Manufactures Numerous Products, One of Which Is Called

question 290

Essay

Ohanlon Corporation manufactures numerous products, one of which is called Delta27. The company has provided the following data about this product:
Required:a. Management is considering increasing the price of Delta27 by 5%, from $62.00 to $65.10. The company's marketing managers estimate that this price hike would decrease unit sales by 10%, from 180,000 units to 162,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will Delta27 earn at a price of $65.10 if this sales forecast is correct? b. Assuming that the total traceable fixed expense does not change, if Ohanlon increases the price of Delta27 to $65.10, what percentage change in unit sales would provide the same net operating income that it currently earns at a price of $62.00? (Round your answer to the nearest one-tenth of a percent.)

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Definitions:

FIRO

A theory of interpersonal relations that explains how interpersonal relationships can be understood through three basic needs: inclusion, control, and affection.

Need For Inclusion

The inherent desire or drive within individuals to belong, be accepted, and feel a part of a group or community.

Social Anxiety

A form of anxiety that occurs in social situations, characterized by a fear of being negatively judged or evaluated by others.

Attachment Theory

A psychological theory that explores the importance of "attachment" in human development, particularly the bonds between children and their caregivers.