35) Reppond Corporation manufactures numerous products, one of which is called Gamma38.
The company has provided the following data about this product:
Unit sales (a)
170,000
Selling price per unit
$
99.00
Variable cost per unit
$
66.00
Traceable fixed expense
4,990,000
Assume that the total traceable fixed expense does not change. How many units of product
Gamma38 would Reppond need to sell at a price of $94.05 to earn the same net operating
income that it currently earns at a price of $99.00? (Round your answer up to the nearest whole
number.)
A) 177,897
B) 200,000
C) 151,212
D) 187,000
Unit sales (a)
170,000
Selling price per unit
$
99.00
Variable cost per unit
66.00
Contribution margin per unit (b)
$
33.00
Total contribution margin (a) × (b)
$
5,610,000
Traceable fixed expense
4,990,000
Net operating income
$
620,000
36) Acri Corporation manufactures numerous products, one of which is called Omicron09. The
company has provided the following data about this product:
Unit sales (a)
100,000
Selling price per unit
$
78.00
Variable cost per unit
49.00
Contribution margin per unit (b)
$
29.00
Total contribution margin (a) × (b)
$
2,900,000
Traceable fixed expense
2,480,000
Net operating income
$
420,000
–
Assume that the total traceable fixed expense does not change. If Acri decreases the price of
Omicron09 to $71.76, what percentage change in unit sales would provide the same net
operating income as is currently being earned at a price of $78.00? (Your answer should be
rounded to the nearest 0.1%.)
A) 27.4%
B) 9.0%
C) −20.0%
D) −14.5%
37) Hammen Corporation manufactures numerous products, one of which is called Omicron43.
The company has provided the following data about this product:
Unit sales (a)
150,000
Selling price per unit
$
18.00
Variable cost per unit
$
10.00
Traceable fixed expense
$
1,040,000
–
Assume that the total traceable fixed expense does not change. If Hammen decreases the price of
Omicron43 to $16.20, what percentage change in unit sales would provide the same net
operating income as is currently being earned at a price of $18.00? (Your answer should be
rounded to the nearest 0.1%.)
A) 11.8%
B) −20.0%
C) 29.0%
D) −13.3%
38) Starowicz Corporation manufactures numerous products, one of which is called Beta10. The
company has provided the following data about this product:
Unit sales (a)
120,000
Selling price per unit
$
12.00
Variable cost per unit
8.00
Contribution margin per unit (b)
$
4.00
Total contribution margin (a) × (b)
$
480,000
Traceable fixed expense
420,000
Net operating income
$
60,000
–
Management is considering decreasing the price of Beta10 by 7%, from $12.00 to $11.16. The
company’s marketing managers estimate that this price reduction would increase unit sales by
15%, from 120,000 units to 138,000 units. Assuming that the total traceable fixed expense does
not change, what net operating income will product Beta-10 earn at a price of $11.16 if this sales
forecast is correct?
A) −$40,800
B) $16,080
C) $379,200
D) $436,080
39) Whittenton Corporation manufactures numerous products, one of which is called Tau14. The
company has provided the following data about this product:
Unit sales (a)
50,000
Selling price per unit
$
83.00
Variable cost per unit
$
59.00
Traceable fixed expense
$
1,100,000
–
What is the net operating income for product Tau14 at the current price?
A) $100,000
B) $3,050,000
C) $1,200,000
D) $4,150,000
Unit sales (a)
50,000
Selling price per unit
$
83.00
Variable cost per unit
59.00
Contribution margin per unit (b)
$
24.00
Traceable fixed expense
1,100,000
Net operating income
$
–
40) Hoder Corporation manufactures numerous products, one of which is called Gamma45. The
company has provided the following data about this product:
Unit sales (a)
60,000
Selling price per unit
$
41.00
Variable cost per unit
29.00
Contribution margin per unit (b)
$
12.00
Total contribution margin (a) × (b)
$
720,000
Traceable fixed expense
680,000
Net operating income
$
40,000
–
Assume that the total traceable fixed expense does not change. How many units of product
Gamma45 would Hoder need to sell at a price of $38.95 to earn the same net operating income
that it currently earns at a price of $41.00? (Round your answer up to the nearest whole
number.)
A) 56,667
B) 72,362
C) 68,342
D) 66,000
41) Cogdill Corporation manufactures numerous products, one of which is called Epsilon78. The
company has provided the following data about this product:
Unit sales (a)
170,000
Selling price per unit
$
19.00
Variable cost per unit
$
15.00
Traceable fixed expense
$
580,000
–
Assume that the total traceable fixed expense does not change. If Cogdill increases the price of
Epsilon78 to $19.76, what percentage change in unit sales would provide the same net operating
income as is currently being earned at a price of $19.00? (Your answer should be rounded to
the nearest 0.1%.)
A) −14.7%
B) −28.3%
C) −5.0%
D) −16.0%
42) Attal Corporation manufactures numerous products, one of which is called Epsilon05. The
company has provided the following data about this product:
Unit sales (a)
90,000
Selling price per unit
$
72.00
Variable cost per unit
43.00
Contribution margin per unit (b)
$
29.00
Total contribution margin (a) × (b)
$
2,610,000
Traceable fixed expense
2,370,000
Net operating income
$
240,000
–
Assume that the total traceable fixed expense does not change. If Attal increases the price of
Epsilon05 to $75.60, what percentage change in unit sales would provide the same net operating
income as is currently being earned at a price of $72.00? (Your answer should be rounded to
the nearest 0.1%.)
A) −11.0%
B) −10.0%
C) −19.2%
D) −9.2%
43) Paluso Corporation manufactures numerous products, one of which is called Alpha42. The
company has provided the following data about this product:
Unit sales (a)
180,000
Selling price per unit
$
18.00
Variable cost per unit
14.00
Contribution margin per unit (b)
$
4.00
Total contribution margin (a) × (b)
$
720,000
Traceable fixed expense
640,000
Net operating income
$
80,000
–
Management is considering increasing the price of Alpha42 by 4%, from $18.00 to $18.72. The
company’s marketing managers estimate that this price hike would decrease unit sales by 10%,
from 180,000 units to 162,000 units. Assuming that the total traceable fixed expense does not
change, what net operating income will product Alpha-42 earn at a price of $18.72 if this sales
forecast is correct?
A) $764,640
B) $209,600
C) $849,600
D) $124,640
44) Inscho Corporation manufactures numerous products, one of which is called Delta10. The
company has provided the following data about this product:
Unit sales (a)
140,000
Selling price per unit
$
85.00
Variable cost per unit
53.00
Contribution margin per unit (b)
$
32.00
Total contribution margin (a) × (b)
$
4,480,000
Traceable fixed expense
4,030,000
Net operating income
$
450,000
–
Assume that the total traceable fixed expense does not change. How many units of product
Delta10 would Inscho need to sell at a price of $90.95 to earn the same net operating income that
it currently earns at a price of $85.00? (Round your answer up to the nearest whole number.)
A) 125,938
B) 126,000
C) 118,051
D) 106,192
45) Contento Corporation manufactures numerous products, one of which is called Kappa15.
The company has provided the following data about this product:
Unit sales (a)
200,000
Selling price per unit
$
68.00
Variable cost per unit
$
44.00
Traceable fixed expense
$
4,540,000
–
What is the net operating income for product Kappa15 at the current price?
A) $4,800,000
B) $13,600,000
C) $260,000
D) $9,060,000
Unit sales (a)
200,000
Selling price per unit
$
68.00
Variable cost per unit
44.00
Contribution margin per unit (b)
$
24.00
Total contribution margin (a) × (b)
$
4,800,000
Net operating income
$
260,000
–
46) Woodridge Corporation manufactures numerous products, one of which is called Alpha32.
The company has provided the following data about this product:
Unit sales (a)
90,000
Selling price per unit
$
99.00
Variable cost per unit
$
78.00
Traceable fixed expense
$
1,690,000
–
Management is considering increasing the price of Alpha32 by 4%, from $99.00 to $102.96. The
company’s marketing managers estimate that this price hike would decrease unit sales by 5%,
from 90,000 units to 85,500 units. Assuming that the total traceable fixed expense does not
change, what net operating income will product Alpha32 earn at a price of $102.96 if this sales
forecast is correct?
A) $556,400
B) $2,246,400
C) $444,080
D) $2,134,080
47) Eastwood Corporation manufactures numerous products, one of which is called Beta96. The
company has provided the following data about this product:
Unit sales (a)
60,000
Selling price per unit
$
88.00
Variable cost per unit
$
53.00
Traceable fixed expense
$
1,980,000
–
Management is considering decreasing the price of Beta96 by 8%, from $88.00 to $80.96. The
company’s marketing managers estimate that this price reduction would increase unit sales by
10%, from 60,000 units to 66,000 units. Assuming that the total traceable fixed expense does not
change, what net operating income will product Beta96 earn at a price of $80.96 if this sales
forecast is correct?
A) $1,845,360
B) $1,677,600
C) −$302,400
D) −$134,640
48) Kopec Corporation manufactures numerous products, one of which is called Delta42. The
company has provided the following data about this product:
Unit sales (a)
170,000
Selling price per unit
$
55.00
Variable cost per unit
$
34.00
Traceable fixed expense
$
3,250,000
Assume that the total traceable fixed expense does not change. How many units of product
Delta42 would Kopec need to sell at a price of $60.50 to earn the same net operating income that
it currently earns at a price of $55.00? (Round your answer up to the nearest whole number.)
A) 122,642
B) 154,762
C) 134,717
D) 144,500
Unit sales (a)
170,000
Selling price per unit
$
55.00
Variable cost per unit
34.00
Contribution margin per unit (b)
$
21.00
Traceable fixed expense
3,250,000
Net operating income
$
320,000
49) Hilfiger Industries Inc. has developed a new forklift, model UH-40, that is designed to offer
superior performance to a comparable forklift sold by Hilfiger’s main competitor. The competing
forklift sells for $96,000 and needs to be replaced after 1,000 hours of use. It also requires
$9,000 of preventive maintenance during its useful life. Model UH-40’s performance capabilities
are similar to the competing product with two important exceptions—it needs to be replaced only
after 2,000 hours of use and it requires $13,000 of preventive maintenance during its useful life.
From a value-based pricing standpoint what is model UH-40’s economic value to the customer
over its 2,000 hour life?
A) $114,000
B) $197,000
C) $101,000
D) $192,000
50) Napp Heavy Machinery Corporation has developed a new drill press—model GJ-37—that
has been designed to outperform a competitor’s best-selling drill press. The competitor’s product
has a useful life of 30,000 hours of service, has operating costs that average $1.70 per hour, and
sells for $169,000. In contrast, model GJ-37 has a useful life of 120,000 hours of service and its
operating cost is $1.10 per hour. Napp has not yet established a selling price for model GJ-37.
From a value-based pricing standpoint what range of possible prices should Napp consider when
setting a price for GJ-37?
A) $579,000 ≤ Value–based price ≤ $748,000
B) $169,000 ≤ Value–based price ≤ $748,000
C) $301,000 ≤ Value–based price ≤ $579,000
D) $169,000 ≤ Value–based price ≤ $301,000
51) Montecalvo Logistic Solutions Corporation has developed a new forklift—model PI-28—
that has been designed to outperform a competitor’s best-selling forklift. The competitor’s
product has a useful life of 10,000 hours of service, has operating costs that average $9.70 per
hour, and sells for $139,000. In contrast, model PI-28 has a useful life of 20,000 hours of service
and its operating cost is $5.50 per hour. Montecalvo has not yet established a selling price for
model PI-28.
From a value-based pricing standpoint what is the differentiation value offered by PI-28 relative
to the competitor’s offering for each 20,000 hours of service?
A) $223,000
B) $236,000
C) $84,000
D) $249,000