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)		52,000
Selling price per unit	$	76.00
Variable cost per unit	$	46.00
Traceable fixed expense	$	1,406,024

Management is considering decreasing the price of Beta-96 by 6%, from $76.00 to $71.44. The company’s marketing managers estimate that this price reduction would increase unit sales by 5%, from 52,000 units to 54,600 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta-96 earn at a price of $71.44 if this sales forecast is correct?

Multiple Choice

$1,322,880

$(17,000)

$(83,144)

$1,389,024