Question

The following information is available for the 20,800 units of X Company's only product sold in 2019:

Selling price	$58.80
Variable costs per unit	$12.70
Total fixed costs	$353,600

Management believes it can increase the selling price in 2020 with no change in unit sales. Variable costs per unit and fixed costs would remain the same. What would the selling price have to be in 2020 in order for X Company's 2020 profit to be $756,600?

Answer 1

Answer:

X Company A B   C
Production units	$ 20,800
Selling price	$ 58.8
Total Sales	$ 1,223,040	B2*B3
Variable Cost per unit	$ 12.7
Total Variable costs	$ 264,160	B2*B6
Total fixed costs	$ 353,600
Total Costs (B)	$ 617,760	B7+B8
Profit	$ 605,280	B4-B9
Estimated Profit	$ 756,600
Estimated Excess Profit	$ 151,320	B12-B10
Estimated increase in selling price	$ 7.275	B13/B2
Estimated selling price	$ 66.075	B3+B14
Total Sales	$ 1,374,360	B2*B15
Estimated Profit	$ 756,600	B16-B9