Question
Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product: Unit sales (a) 95,000
Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product: Unit sales (a) 95,000 Selling price per unit $ 73.00 Variable cost per unit $ 58.00 Traceable fixed expense $ 1,261,000 Management is considering increasing the price of Alpha-32 by 4%, from $73.00 to $75.92. The companys marketing managers estimate that this price hike would decrease unit sales by 7%, from 95,000 units to 88,350 units.Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $75.92 if this sales forecast is correct?
Multiple Choice
$322,232
$1,583,232
$1,702,400
$441,400
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