Herrell Corporation manufactures numerous products, one of which is called Delta11. The company has provided the following data about this product: Unit sales (a) 110,000 Selling price per unit$29.00 Variable cost per unit 19.00 Contribution margin per unit (b)$10.00 Total contribution margin (a) × (b)$1,100,000 Traceable fixed expense 1,010,000 Net operating income$90,000 ?Management is considering increasing the price of Delta11 by 5%, from $29.00 to $30.45. The company's marketing managers estimate that this price hike would decrease unit sales by 10%, from 110,000 units to 99,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will product Delta11 earn at a price of $30.45 if this sales forecast is correct?
A. $123,550
B. $1,259,500
C. $1,133,550
D. $249,500
Answer: A
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