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ACC310_Week1_Assignment

# ACC310_Week1_Assignment - Current Cost Proportion of...

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Current Profits: 60,000 units x \$15  - \$700,000  = \$200,000  Increase in Sales Price: Current Price x Increase = New Sales Price \$30  x 110% = \$33  Increase in Variable Costs: x Increase x = Labor: \$15  x 115% x 50% = \$8.63  Materials: \$15  x 110% x 25% = \$4.13  Overhead: \$15  x 120% x 25% = \$4.50  Total \$17.25  Increase in Fixed Costs: Current Costs x Increase = New Fixed Costs \$700,000  x 105% = \$735,000  Sales Required to Maintain Profits: Target Profit = (P - V)X - F \$200,000  = (\$33 - \$17.25)X - \$735,000 \$935,000  = \$15.75X X = \$935,000  \$15.75  X = 59,365.08 units This means that 59,365 units would need to be sold to maintain at least \$200,000 in profits Dollar Sales Level: 59,365 x \$33  = \$1,959,045  Sales of \$1,959,045 would be needed to maintain a profit of \$200,000

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Unformatted text preview: Current Cost Proportion of variable costs New Variable Cost Desired Profit Increase: 106% x \$200,000 = \$212,000 Sales Required to Gain Increased Profits: Target Profit = (P - V)X-F \$212,000 = (\$33 - \$17.25)X - \$735,000 \$947,000 = \$15.75X X = \$947,000 \$15.75 X = 60126.98 units Dollar Sales Level: 60,127 x \$33 = \$1,984,190.48 Target Profit = [(P x units) - (V x units)] - F \$212,000 = P(60,000)- (\$17.25 x 60,000) - \$735,000 \$947,000 = P(60,000)-\$1,035,000 \$1,982,000 = P(60,000) P = \$1,982,000 60,000 P = \$33.03...
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ACC310_Week1_Assignment - Current Cost Proportion of...

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