Holder Manufacturing had $125000 of net income in 2015 when the selling price per unit was $100 the variable costs per unit were $70 and the fixed costs were $475000. Management expects per unit data and total fixed costs to remain the same in 2016. The president of Holder Manufacturing is under pressure from stockholders to increase net income by $60000 in 2016.
Instructions
(a) Compute the number of units sold in 2015.
(b) Compute the number of units that would have to be sold in 2016 to reach the stockholders' desired profit level.
(c) Assume that Holder Manufacturing sells the same number of units in 2016 as it did in 2015. What would the selling price have to be in order to reach the stockholders' desired profit level.

Question

Quizplus · Accepted Answer

The Answer of Holder Manufacturing had $125000 of net income in 2015 when the selling price per unit was $100 the variable costs per unit were $70 and the fixed costs were $475000. Management expects per unit data and total fixed costs to remain the same in 2016. The president of Holder Manufacturing is under pressure from stockholders to increase net income by $60000 in 2016.
Instructions
(a) Compute the number of units sold in 2015.
(b) Compute the number of units that would have to be sold in 2016 to reach the stockholders' desired profit level.
(c) Assume that Holder Manufacturing sells the same number of units in 2016 as it did in 2015. What would the selling price have to be in order to reach the stockholders' desired profit level.

Holder Manufacturing Had $125000 of Net Income in 2015 When