The following information is for a product manufactured and sold by Richards Corporation:
Sales price per unit,$70
Variable cost per unit,$40
Total fixed costs,$600,000
Last year,Richards earned a profit of $30,000.
Required:
1)How many units did Richards sell last year?
2)Richards' managers are considering decreasing the sales price to $60 in an effort to increase market share.Also,the company wants a profit of $60,000.How many units would it have to sell at the lower selling price to achieve this target?

Question

Quizplus · Accepted Answer

The Answer of The following information is for a product manufactured and sold by Richards Corporation:
Sales price per unit,$70
Variable cost per unit,$40
Total fixed costs,$600,000
Last year,Richards earned a profit of $30,000.
Required:
1)How many units did Richards sell last year?
2)Richards' managers are considering decreasing the sales price to $60 in an effort to increase market share.Also,the company wants a profit of $60,000.How many units would it have to sell at the lower selling price to achieve this target?

The Following Information Is for a Product Manufactured and Sold