Manx Company had $169,750of net income in 2012 when the selling price per unit w

Question

Manx Company had $169,750of net income in 2012 when the selling price per unit was $190, the variable costs per unit were $70, and the fixed costs were $1,222,250. Management expects per unit data and total fixed costs to remain the same in 2013. The president of Manx Company is under pressure from stockholders to increase net income by $57,990in 2013.

Assume that Manx Company sells the same number of units in 2013 as it did in 2012. What would the selling price have to be in order to reach the stockholders

Explanation / Answer

169750 = 120x - 1222250 x=11600 number of units sold = 11600 227740 = 11600(SP - 70) - 1222250 gives SP = Selling price = $195

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