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What net operating income will product alpha-32 earn

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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) 77,000 Selling price per unit$76.00 Variable cost per unit$61.00 Traceable fixed expense$1,323,000

Management is considering increasing the price of Alpha-32 by 5%, from $76.00 to $79.80. The company's marketing managers estimate that this price hike would decrease unit sales by 5%, from 77,000 units to 73,150 units.

Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $79.80 if this sales forecast is correct?

Reference no: EM132326229

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