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Assume that a company manufactures numerous products, one of which is called Product A. The company has provided the following data regarding this product: Unit
Assume that a company manufactures numerous products, one of which is called Product A. The company has provided the following data regarding this product: Unit sales (a) Selling price per unit Variable cost per unit Contribution margin per unit (b) 120,000 $ 20.00 12.00 $ 8.00 Total contribution margin (a) * (b) Traceable fixed expenses $960,000 932,000 $ 28,000 Net operating income The company is considering increasing the price of Product A by 10%, from $20.00 to $22.00. The company estimates that this price hike will decrease unit sales by 15%, from 120,000 units to 102,000 units. How many units would the company need to sell at a price of $22.00 to earn the exact same profit that it currently earns at a price of $20.00? Multiple Choice 96,000 O 94,600 O 102,000 97,400
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