Kinsley Corporation manufactures numerous products, one of which is called Kappa-03. The company has provided the following data about this product: Unit sales (a) 50,000 Selling price per unit$36.00 Variable cost per unit$26.00 Traceable fixed expense$470,000 ?Management is considering increasing the price of Kappa-03 by 7%, from $36.00 to $38.52. The company's marketing managers estimate that this price hike would decrease unit sales by 10%, from 50,000 units to 45,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Kappa-03 earn at a price of $38.52 if this sales forecast is correct?
A. $626,000
B. $93,400
C. $563,400
D. $156,000
Answer: B
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