Galad Corporation manufactures numerous products, one of which is called A32. The company has provided the following data about this product:

Unit sales (a)		75,000
Selling price per unit	$	76.00
Variable cost per unit	$	61.00
Traceable fixed expense	$	1,325,000

Management is considering increasing the price of A32 by 7%, from $76.00 to $81.32. The companys marketing managers estimate that this price hike would decrease unit sales by 6%, from 75,000 units to 70,500 units. Assuming that the total traceable fixed expense does not change, what net operating income will product A32 earn at a price of $81.32 if this sales forecast is correct?

Multiple Choice

• $199,000

• $107,560

• $1,432,560

• $1,524,000