Beacon Company makes a product that has a variable cost of $25 per unit and a selling price of $45 per unit.Annual fixed costs total $860,000.Beacon's net income last year was $240,000.Beacon's management is considering lowering the selling price to $40.
Required:
1)How many units did Beacon sell last year?
2)If Beacon Company wants to maintain the same level of income that it had last year,how many units would it have to sell at the new selling price of $35?

Question

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The Answer of Beacon Company makes a product that has a variable cost of $25 per unit and a selling price of $45 per unit.Annual fixed costs total $860,000.Beacon's net income last year was $240,000.Beacon's management is considering lowering the selling price to $40.
Required:
1)How many units did Beacon sell last year?
2)If Beacon Company wants to maintain the same level of income that it had last year,how many units would it have to sell at the new selling price of $35?

Beacon Company Makes a Product That Has a Variable Cost