9. In 2018, X Company's revenue-based profit function was 0.39R - $65,300. Only one change is expected in 2019, a 10% increase in total fixed costs. What must revenue be in 2019 for X Company to earn $37,000?
10. In 2018, X Company sold 7,000 units of its only product for
$36.10 each. Unit costs were as follows:
| Variable manufacturing | $14.10 | ||
| Fixed manufacturing | 3.25 | ||
| Variable selling | 4.28 | ||
| Fixed selling | 2.37 | ||
| Total | 24.00 | ||
In 2019, the selling price, variable costs per unit, and total
fixed costs are not expected to change. Assuming a tax rate of 33%,
how many units must X Company sell in 2019 in order to earn $75,000
after taxes?
9.When there is an increase of 10% in fixed costs.
0.39R - (65,300+10%) = 37,000
=>0.39R-71,830=37,000
=>0.39R=108,830
=>R=279,051.
10. total fixed manufacturing cost = (3.25*7000)=>22,750.
total fixed selling cost = (2.37*7000)=>16,590.
total fixed costs =39,340.
required earnings =75,000 after tax
=>before tax earnings = 75,000 / (1- 0.33 tax rate)
=>75,000 / 0.67
=>$111,940.
total earnings before deduction of fixed costs =111,940+39,340
=>151,280.
contribution per unit = 36.10 selling price-14.10-4.28 variable costs =17.72.
number of units to be sold = 151,280 / 17.72
=>8,537. units
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