Question

Martinez Company had $152,000 of net income in 2016 when the selling price per unit was $154, the variable costs per unit were $94, and the fixed costs were $571,700. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Martinez Company is under pressure from stockholders to increase net income by $64,100 in 2017.

(a)

Answer 1

Profit = Net income + Increase in net income

= 152,000+64,100

= $216,100

Variable cost per unit = $94

Fixed cost = $571,700

Let the selling price per unit be $K

Profit = Sales - Variable cost - Fixed cost

216,100= 12,062K - 12,062 x 94 - 571,700

216,100 = 12,062K - 1,133,828-571,700

216,100 = 12,062K-1,705,528

12,062K = 1,921,628

K = $159

Selling price have to be in order to reach the stockholders' desired profit level is $159

Kindly comment if you need further assistance.

Thanks‼!