PL l satherniAonsmn Act ESOURCES mework Exercise 19-14 (Part Level Submission) u

Question

PL l satherniAonsmn Act ESOURCES mework Exercise 19-14 (Part Level Submission) under presure from stockholders to increase net income by $61,900 in 2017 (a) Naylor Company had $154,300 of net income in 2016 when the seling price per unit was $154, the variable costs per unt were $94, and the fed coes were S572.S00 Management expects per unit data and total ed osts tDreman the same n 2017. The president of Naylor Company aur 8rswers correct. Compute the number of units sold in 2016. (Round anwer to chnet plces eg. 1,225) 2114 unes Attomptor 2 of 3 used Compute the number of

Explanation / Answer

No of units sold in 2016 is

Use this equation to calculate the no of units sold, Revenue - costs( fixed+variable ) = net income

sales price * no of units sold - total fixed costs - variable cost * no of units sold = 154300( net income)

Lets say no of units sold is x

154*x - 572500 - 94*x = 154300

60*x = 154300+572500

x = 12114

Answer B : New net income = $154300 + $61900 = $216200

As it is already given that fixed cost and other unit costs are still the same

Using equation used in the above question :

sales price * no of units sold - total fixed costs - variable cost * no of units sold = 216200( net income)

154* X - 572500 - 94*x = 216200

60*x = 216200 +572500

x = 13145 no of units to be sold

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