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Eastwood Corporation manufactures numerous products, one of which is called Beta-96. The company has provided the following data about this product: Unit sales (a) Selling
Eastwood Corporation manufactures numerous products, one of which is called Beta-96. The company has provided the following data about this product: Unit sales (a) Selling price per unit Variable cost per unit Traceable fixed expense 64,000 $ 74.00 $ 47.00 $1,576,760 Management is considering decreasing the price of Beta-96 by 5%, from $74.00 to $70.30. The company's marketing managers estimate that this price reduction would increase unit sales by 5%, from 64,000 units to 67,200 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta-96 earn at a price of $70.30 if this sales forecast is correct? Multiple Choice $1,491,200 $(85,560) $(11,000) $1,565,760
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