Rundle Company produces a product that has a variable cost of $26 per unit and a...
Rundle Company produces a product that has a variable cost of $26 per unit and a sales price of $58 per unit. The company’s annual fixed costs total $660,000. It had net income of $260,000 in the previous year. In an effort to increase the company’s market share, management is considering lowering the selling price to $51 per unit.
Required
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If Rundle desires to maintain net income of $260,000, how many additional units must it sell to justify the price decline?
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Assume that in addition to lowering its selling price to $51, Rundle also desires to increase its net income by $80,000. Determine the number of units the company must sell to earn the desired income.
Variable cost per unit
Total variable cost
Total contribution margin
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