Kinsley Corporation manufactures numerous products, one of which is called Kappa-03. The company has provided the following data about this product:

Unit sales (a)		50,000
Selling price per unit	$	36.00
Variable cost per unit	$	26.00
Traceable fixed expense	$	470,000

Management is considering increasing the price of Kappa-03 by 7%, from $36.00 to $38.52. The companys marketing managers estimate that this price hike would decrease unit sales by 10%, from 50,000 units to 45,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Kappa-03 earn at a price of $38.52 if this sales forecast is correct?

Multiple Choice

$626,000

$563,400

$156,000

$93,400

3 Kinsley Corporation manufactures numerous products, one of which is called Kappa-03. The company has provided the following data about this product Unit sales (a) Selling price per unit variable cost per unit Traceable fixed expense 50,000 $ 36.00 $ 26.00 $470,000 Management is considering increasing the price of Kappa-03 by 7% from $36.00 to $38.52. The company's marketing managers estimate that this price hike would decrease unit sales by 10% from 50,000 units to 45,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Kappa-03 earn at a price of $38.52 if this sales forecast is correct? Multiple Choice $626,000 5563,400 5156,000 593.400