Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Completion Status: QUESTION 1 5 points Seve Answer Toyota Corporation manufactures numerous products, one of which is called P90. The company has provided the following
Completion Status: QUESTION 1 5 points Seve Answer Toyota Corporation manufactures numerous products, one of which is called P90. The company has provided the following data about this product Unit sales (a) Selling price per unit 90,000 $60.00 Variable cost per unit 28 $32.00 $2,880,000 Contribution margin per unit (b) Total contribution margin (a) x (b) Traceable fixed expense Net operating income Required: 950,000 $1,930,000 A. Management is considering decreasing the selling price of P90 by 10%. The company's marketing managers estimate that this price reduction would increase unit sales by 20%. Assuming that the total traceable fixed expense does not change, what net operating income will P90 cam at a price of $54.00 if this sales forecast is correct? B. Assume that management is considering increasing the price of P90 by 5%, from $60.00 to $63.00. The company's sales team estimate that this price reduction would decrease in unit sales by 12%. Assuming that the total traceable fixed expense increased by 10% change, what net operating income will P90 carn, if this sales forecast is correct? C From the above two cases (a) and (h) which one is mod nenfitable? Find the differential.net oneratina income? Click Save and Submit to save and submit. Click Save All Answers to save all answers. SaveAw Save and Submit Traceable fixed expense Net operating income $2,880,000 950,000 $1,930,000 Required: A. Management is considering decreasing the selling price of P90 by 10%. The company's marketing managers estimate that this price reduction would increase unit sales by 20%. Assuming that the total traceable fixed expense does not change, what net operating income will P90 cam at a price of $54.00 if this sales forecast is correct? B. Assume that management is considering increasing the price of P90 by 5%, from $60.00 to $63.00. The company's sales team estimate that this price reduction would decrease in unit sales by 12%. Assuming that the total traceable fixed expense increased by 10% change, what net operating income will P90 carn, if this sales forecast is correct? C. From the above two cases (a) and (b) which one is most profitable? Find the differential net operating income? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph 053 3 Arial 3 3 3 10pt XX, + 0 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Cana r Save All Answers Save and Submit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started