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.

Question

Business

Hugh Weiss

5 July, 10:44

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.

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Rodney Buck · Answer 1

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