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Starowicz Corporation manufactures numerous products, one of which is called Beta10. The company has provided the following data about this product Unit sales (a) selling
Starowicz Corporation manufactures numerous products, one of which is called Beta10. The company has provided the following data about this product Unit sales (a) selling price per unit Variable cost per unit Contribution margin per unit (b) Total contribution margin (a) x (b) Traceable fixed expense Net operating income 120,eee $ 12.00 8.8e $ 4.0e $480,00e 42e,ee $ 60,00e Management is considering decreasing the price of Beta10 by 7%, from $12.00 to $11.16. The company's marketing managers estimate that this price reduction would increase unit sales by 15%, from, 120,000 units to 138,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Beta-10 earn at a price of $11.16 If this sales forecast is correct? Multiple Choice $40,800 $16,080 $379,200 $436,080 Ecob Corporation uses the absorption costing approach to cost-plus pricing as described in the text to set prices for its products. Based on budgeted sales of 19,000 units next year, the unit product cost of a particular product is $16.00. The company's selling and administrative expenses for this product are budgeted to be $250,800 in total for the year. The company has invested $440,000 in this product and expects a return on investment of 14%. The selling price based on the absorption costing approach for this product would be closest to: Multiple Choice $59.21 $29.20 $32.44 $18.24
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