Jupiter Company sells glass vases at a wholesale price of $2.50 per unit.The variable cost of manufacture is $1.75 per unit.The monthly fixed costs are $7,500.Its current sales are 25,000 units per month.If the company wants to increase its operating income by 20%,how many additional units,must it sell? (Round intermediate calculations to two decimal places.)

Question

Quizplus · Accepted Answer

To increase operating income by 20%, calculate the current operating income: (25,000 units * ($2.50 - $1.75)) - $7,500 = $11,250. A 20% increase is $11,250 * 0.20 = $2,250. To find additional units needed: $2,250 / ($2.50 - $1.75) = 3,000 units.

Jupiter Company Sells Glass Vases at a Wholesale Price of $2.50