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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This note was uploaded on 08/14/2011 for the course ACC 310 taught by Professor Parker during the Spring '11 term at Ashford University.

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ACC310_Week1_Assignment - Current Cost Proportion of...

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