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) 97,000 selling price per unit $ 75.00 variable cost per unit $ 60.00 traceable fixed expense $ 1,304,000 management is considering increasing the price of alpha-32 by 6%, from $75.00 to $79.50. the company’s marketing managers estimate that this price hike would decrease unit sales by 5%, from 97,000 units to 92,150 units. assuming that the total traceable fixed expense does not change, what net operating income will product alpha-32 earn at a price of $79.50 if this sales forecast is correct?

$492,925

Explanation:

Net operating income of product Alpha- 32 at a price of $79.50 if the sales forecast is correct.

Unit sales = 92,150 units as per sales forecast

Selling price per unit = $79.50

Contribution:

= Sales - variable costs

= (units sold × Selling price per unit) - (units sold × Variable cost per unit)

= (92,150 × $79.50 ) - (92,150 × $60.00)

= $7,325,925 - $5,529,000

= $1,796,925

Net operating income:

= Contribution - Fixed cost

= $1,796,925 - $1,304,000

= $492,925

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

answer; common market;