Question

Sales and costs for X Company in 2018 were as follows:

		Total	Per Unit
Sales		$145,140	$17.70
Variable manufacturing costs		64,288	7.84
Variable selling costs		19,844	2.42
Fixed manufacturing costs		8,610	1.05
Fixed selling costs		3,772	0.46

X Company expects sales to increase from 8,200 units in 2018 to 8,800 units in 2019. It also expects direct material costs per unit to increase by $1.50 and fixed selling costs to decrease by $3,000. What is expected profit in 2019?

Answer 1

Sales Revenue	$    1,55,760.00	=8800*17.7
Less Variable Costs
Manufacturing Costs	$        82,192.00	=8800*(7.84+1.5)
Selling Costs	$        21,296.00	=8800*2.42
Total Variable costs	$    1,03,488.00
Contribution Margin	$        52,272.00
Less Fixed Costs
Manufacturing Costs	$          8,610.00
Selling Costs	$             772.00	=3772-3000
Total Fixed Costs	$          9,382.00
Profit	$        42,890.00