Buzby Corporation manufactures numerous products, one of which is called Epsilon-39. The company has provided the following data about this product:
Required:a. Management is considering decreasing the price of Epsilon-39 by 5%, from $43.00 to $40.85. The company's marketing managers estimate that this price reduction would increase unit sales by 10%, from 90,000 units to 99,000 units. Assuming that the total traceable fixed expense does not change, what net operating income will Epsilon-39 earn at a price of $40.85 if this sales forecast is correct?b. Assuming that the total traceable fixed expense does not change, how many units of Epsilon-39 would Buzby need to sell at a price of $40.85 to earn the same net operating income that it currently earns at a price of $43.00? (Round your answer up to the nearest whole number.)

a.The profit at the price of ${{[a(9)]:#,##0.00}} per unit is computed as follows:Profit = (Selling price per unit − Variable cost per unit) × Quantity sold − Fixed expensesProfit = (${{[a(9)]:#,##0.00}} per unit − ${{[a(3)]:#,##0.00}} per unit) × {{[a(11)]:#,###}} units − ${{[a(6)]:#,###}}Profit = (${{[a(12)]:#,##0.00}} per unit) × {{[a(11)]:#,###}} units − ${{[a(6)]:#,###}}Profit = ${{[a(13)]:#,###}} − ${{[a(6)]:#,###}} = ${{[a(14)]:#,###}}b.Profit = (Selling price per unit − Variable cost per unit) × Quantity sold − Fixed expenses${{[a(7)]:#,###}} = (${{[a(9)]:#,##0.00}} per unit − ${{[a(3)]:#,##0.00}} per unit) × Quantity sold − ${{[a(6)]:#,###}}${{[a(5)]:#,###}} = (${{[a(9)]:#,##0.00}} per unit − ${{[a(3)]:#,##0.00}} per unit) × Quantity sold${{[a(5)]:#,###}} = (${{[a(12)]:#,##0.00}} per unit) × Quantity sold Quantity sold = ${{[a(5)]:#,###}} ÷ ${{[a(12)]:#,##0.00}} per unit = {{[a(15)]:#,###}} units (rounded up)