Chruch Corporation Manufactures Numerous Products, One of Which Is Called

question 39

Multiple Choice

Chruch Corporation manufactures numerous products, one of which is called Tau42. The company has provided the following data about this product:

-Management is considering decreasing the price of Tau42 by 6%,from $64.00 to $60.16.The company's marketing managers estimate that this price reduction would increase unit sales by 10%,from 60,000 units to 66,000 units.Assuming that the total traceable fixed expense does not change,what net operating income will product Tau42 earn at a price of $60.16 if this sales forecast is correct?

• A) -$53,440
• B) $969,600
• C) -$150,400
• D) $1,066,560

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Definitions:

Sustainable Income

Income levels that can be maintained over time without depleting the resources or capabilities generating the income; often used in the context of environmental and social governance.

Financial Statement Analysis

The process of examining and analyzing a company's financial statements in order to make informed business and financial decisions.

Base Amount

A fundamental quantity or value from which other calculations or analyses are derived.

Business Segment

A distinct part of a company that focuses on a specific product or market sector, often with its own performance measurement.