Question

Compute the number of units sold in 2016. (Round answer to O decimal places, e.g. 1,225.) T 120621 units

Martinez Company had $152,000 of net income in 2016 when the selling price per unit was $154, the variable costs per unit were $94, and the fixed costs were $571,700. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Martinez Company is under pressure from stockholders to increase net income by $64,100 in 2017.

Answer 1

Answer
During year 2016
Selling price p.u	$ 154
Less: variable Cost	$94
Contribution	$60
Number of units sold to achieve profit of $1,52,000 and cover fixed cost of $ 5,71,700
=(1,52,000+5,71,700)/60
=12,062 units
To increase profits by $64,100 in 2017 when other unit rates and fixed cost remaining same, number of units to be sold is as under
Required Profit	$      2,16,100
Fixed Cost	$      5,71,700
Total	$      7,87,800
Contribution p.u	$60
No. of units to be sold	13130