Cabebe Corporation Manufactures Numerous Products,one of Which Is Called Omicron55

Essay

Cabebe Corporation manufactures numerous products,one of which is called Omicron55.The company has provided the following data about this product:
Required:
a.Management is considering decreasing the price of Omicron55 by 4%,from $54.00 to $51.84.The company's marketing managers estimate that this price reduction would increase unit sales by 10%,from 140,000 units to 154,000 units.Assuming that the total traceable fixed expense does not change,what net operating income will Omicron55 earn at a price of $51.84 if this sales forecast is correct?
b.Assuming that the total traceable fixed expense does not change,if Cabebe decreases the price of Omicron55 to $51.84,what percentage change in unit sales would provide the same net operating income that it currently earns at a price of $54.00? (Round your answer to the nearest one-tenth of a percent.)