Question

1.The following information is available for the 21,300 units of X Company's one product sold in 2018: Selling price $55.50 Variable costs per unit $28.40 Total fixed costs $340,800 Management believes it can increase the selling price in 2019 with no effect on unit sales. Variable costs per unit and fixed costs will remain the same. How much would the selling price have to be increased in order for X Company's 2019 profit to be $295,538 [rounded to two decimal places]?

2. X Company has the following information for its three products in 2018:

	Unit Sales	Contribution Margin
Product A	47,900	$5.20
Product B	7,300	$11.20
Product C	21,400	$11.20
Total	76,600	$27.60

Fixed costs in 2018 were $319,000. In 2019, the unit sales mix and fixed costs will be the same as in 2018, but sales will increase to 84,260 units. What will profit be [round all small numbers to two decimal places]?

Answer 1

1
soluion:
sales=fixed cost +variable cost+profit
=340800+ 604920+295538
=1241258
selling price=sales /sales unit
=1241258/21300
=$58.28 per unit
2. computation of amount of profit if sales unit increase to 84260 unit
product	2018	2018	2019	2019
	sales unit	contribution margin per unit	sales unit	contribution margin
	(a)	(b)	(d)	(b)*(d)
A	47900	$5.20	52690	273988
B	7300	11.2	8030	89936
C	21400	11.2	23540	263648
total				627572
less : fixes cost				-319000
profit				308572
working note;
portion of sales unit distributed in the year 2019 on procduct:
A=47900units/76600units*84260units
=52690 units
B=7300 units/76600units*84260 units
=8030 units
C=21400units/76600units*84260units
=23540 units