How did u figure out question # 29 on the AICPA 2012 released questions:.. doesnt seem complicated but not getting the right answer for some reason :( dont know what im doing wrong
ceramics manufacturer sold cups last year for $7.50 each. Variable costs of manufacturing were $2.25
per unit. The company needed to sell 20,000 cups to break even. Net income was $5,040. This year,
the company expects the following changes: sales price per cup to be $9.00; variable manufacturing
costs to increase 33.3%; fixed costs to increase 10%; and the income tax rate to remain at 40%. Sales in
the coming year are expected to exceed last year's sales by 1,000 units. How many units does the
company expect to sell this year?
how is the answer d.. i got C
((7.50 – 2.25) * 20,000)*=105,000
Before-tax income: 5,040/0.60 = 8,400
This year sold units: (105,000+8,400)/(7.50 – 2.25) = 21,600
Company expect to increase sale of units by 1,000, so 21,600+1,000 = 22,600
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