Question

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

		Total	Per Unit
Sales		$158,400	$18.00
Variable manufacturing costs		68,376	7.77
Variable selling costs		18,568	2.11
Fixed manufacturing costs		8,536	0.97
Fixed selling costs		4,488	0.51

X Company expects sales to increase from 8,800 units in 2018 to 9,300 units in 2019. It also expects direct labor costs per unit to decrease by $1.30 and fixed overhead costs to increase by $3,300. What is expected profit in 2019?

Answer 1

Answer-The expected profit in 2019 is =$71282.

X COMPANY
EXPECTED PROFIT
FOR THE YEAR ENDED 2019
PARTICULARS		AMOUNT
		$
Sales	9300 units*$18.00 per unit	167400
Less- Variable costs
Variable manufacturing costs	($7.77 per unit-$1.30 per unit)*9300 units	60171
Variable selling costs	9300 units*$2.11 per unit	19623
Contribution margin		87606
Less- Fixed costs
Fixed manufacturing costs	($8536+$3300)	11836
Fixed selling costs		4488
Net income		71282