n Assignment Exercise 18-14 unit data and total fxed costs to remain the same in
ID: 2519177 • Letter: N
Question
n Assignment Exercise 18-14 unit data and total fxed costs to remain the same in 2014. The president of Naylor Company is under pressure from stockhoiders to increase net income by $ Compute the number of units sold in 2013 price per unit was $150, the vanable costs per unit were $90, and the fixed costs were $570,000. Management expects pe 15 25 Compute the number of units that would have to be sold in 2014 to reath the stockholders desired proft e 35 41 42 etls the same number of units in 2014 as it dia in 2013. whet wouds the selling ance have to be in erder to reach the stockhoiders' desired proft level? (Round answer to 2 decimaf places, e.g. 32.25 t0 New selling price Question Attemptsi O of 3 used SAVE PFOR LATERExplanation / Answer
(a) Number of units sold in 2013 = 13,000 Units
210,000 = ($150-$90)x - $570,000
$780,000 = 60x
x = 13,000 Units
(b) Number of units that would have to be sold in 2014 to reach the stockholders' desired profit level = 13,867 Units
$210,000 + $52,000 = ($150-$90)x - $570,000
$832,000 = 60x
x = 13,867 Units
c. Selling price have to be in order to reach the stockholders' desired profit level = $154.00
$210,000 + $52,000 = (x-$90)(13,000) - $570,000
$262,000 = 13,000x - $1,170,000 - $570,000
$2,002,000 = 13000x
x = $154.00
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