Sales and costs for X Company in 2018 were as follows: Total Per Unit Sales $152,220 $17.20 Variable manufacturing costs 54,516 6.16 Variable selling costs 23,984 2.71 Fixed manufacturing costs 8,230 0.93 Fixed selling costs 2,390 0.27 X Company expects sales to increase from 8,850 units in 2018 to 9,750 units in 2019. It also expects direct labor costs per unit to decrease by $1.00 and fixed overhead costs to increase by $3,300. What is expected profit in 2019?

Question

Business

Nathan Mccarthy

10 June, 03:03

Sales and costs for X Company in 2018 were as follows: Total Per Unit Sales $152,220 $17.20 Variable manufacturing costs 54,516 6.16 Variable selling costs 23,984 2.71 Fixed manufacturing costs 8,230 0.93 Fixed selling costs 2,390 0.27 X Company expects sales to increase from 8,850 units in 2018 to 9,750 units in 2019. It also expects direct labor costs per unit to decrease by $1.00 and fixed overhead costs to increase by $3,300. What is expected profit in 2019?

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Answers (1)

Know the Answer?

Kenley Santos · Answer 1

The correct answer is 77.047

Explanation:

Firstly, calculate each item

* Revenue (units * Price) = $9750 * 17.20 = 167.700

* Variable manufacturing cost = (Units * (Variable manufacturing cost 2018 - decrease expected for 2019) = ($9750 * (6.16-1) = 50.310

* Fixed Manufacturing cost = (Fixed manufacturing cost 2018 + Increase expected for 2019) = (8.230+3300) = 11.530

* Variable selling cost = 9750*2.71 = 26.423

* Fixed selling cost = 2390

Units price Total

Revenue 9,750.00 17.20 167,700.00

Variable Man 9,750.00 5.16 (50,310.00)

Fixed Man. 9,750.00 1.18 (11,530.00)

Vari Sell. 9,750.00 2.71 (26,423.05)

Fixed Sell 9,750.00 0.27 (2,390.00)

Profit 77,046.95