Question

Ivanhoe Company had $177,900 of net income in 2019 when the selling price per unit was $154, the variable costs per unit were 598, and the fixed costs were $572.500. Management expects per unit data and total fixed costs to remain the same in 2020. The president of Ivanhoe Company is under pressure from stockholders to increase not income by $93.800 in 2020. (a) Compute the number of units sold in 2019.

Answer 1

Answer:

13,400 units

Explanation:

Data given in the question

Sale price = $154

Variable cost = $98

Fixed cost = $572,500

Net income = $177,900

So, Let us assume the number of units sold in 2019 be X

(Sales price - Variable costs) × sales units - Fixed cost = Net income

($154 - $98)  × X - $572,500 = $177,900

$56 × X - $572,500 = $177,900

$56 × X = $177,900 + $572,500

$56 × X = $750,400

X = 13,400 units

Hence, the number of units sold in 2019 is 13,400 units