Naylor Company had $153,400 of net income in 2016 when the selling price per uni

Question

Naylor Company had $153,400 of net income in 2016 when the selling price per unit was $152, the variable costs per unit were $92, and the fixed costs were $573,200. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Naylor Company is under pressure from stockholders to increase net income by $64,300 in 2017.

(a)

Compute the number of units sold in 2016.

Naylor Company had $153,400 of net income in 2016 when the selling price per unit was $152, the variable costs per unit were $92, and the fixed costs were $573,200. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Naylor Company is under pressure from stockholders to increase net income by $64,300 in 2017.

Explanation / Answer

Selling Price per unit 152 Less: Variable cost per unit 92 Contribution margin per unit 60 Particulars Net Income in 2016 153400 Add: Fixed costs 573200 Contribution Margin 726600 Contribution margin per unit 60 Number of Units sold in 2016 (726600/60) 12110

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