Asked by Betty ty_re on Jun 16, 2024

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Weitman Corporation manufactures numerous products, one of which is called Epsilon50. The company has provided the following data about this product: Weitman Corporation manufactures numerous products, one of which is called Epsilon50. The company has provided the following data about this product:   What is the net operating income for product Epsilon50 at the current price? A)  $1,430,000 B)  $150,000 C)  $3,770,000 D)  $2,490,000 What is the net operating income for product Epsilon50 at the current price?

A) $1,430,000
B) $150,000
C) $3,770,000
D) $2,490,000

Net Operating Income

A measure of a company's profitability from its regular, core business operations, calculated as revenue minus operating expenses, excluding taxes and interest.

Current Price

The present market value or selling price of a good, service, or asset.

Product

An item or service created as a result of a process, intended for the market.

  • Investigate the effects of selling price alterations on unit sales and net operating income.
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Ariah DeleonJun 21, 2024
Final Answer :
B
Explanation :
The net operating income for product Epsilon50 at the current price can be calculated as:
Net Operating Income = (Sales - Variable Costs) - Fixed Costs
= (10,000,000 x 0.15) - (6,000,000 x 0.25) - 2,500,000
= $1,500,000 - $1,500,000 - 2,500,000
= -$500,000
Since the net operating income is negative, the company is incurring losses on this product. Therefore, the best choice is B, which is the only positive value among the given options, and can be considered as the potential profit for the product if the company can improve its cost structure or increase the selling price.