Question

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

		Total	Per Unit
Sales		$149,565	$16.90
Variable manufacturing costs		68,588	7.75
Variable selling costs		26,373	2.98
Fixed manufacturing costs		8,673	0.98
Fixed selling costs		3,894	0.44

X Company expects sales to increase from 8,850 units in 2018 to 9,550 units in 2019. It also expects direct material costs per unit to decrease by $2.00 and fixed overhead costs to increase by $3,800. What is expected profit in 2019?

Answer 1

Expected profit in 2019 = $61,656.50 or $61,657 depending on round off

.Working

	Per unit	Units	Total
Sales revenue	$    16.90	9550	$ 161,395.00
Variable costs
Variable manufacturing cost	$       5.75	9550	$    54,912.50
Variable selling cost	$       2.98	9550	$    28,459.00
Total variable cost	$       8.73	9550	$    83,371.50
Contribution margin	$       8.17	9550	$    78,023.50
Fixed costs
Fixed manufacturing cost			$    12,473.00
Fixed selling cost			$      3,894.00
Total fixed cost			$    16,367.00
Net operating income			$    61,656.50