Naylor Company had 151600 of net income in 2016 when the sel

Naylor Company had $151,600 of net income in 2016 when the selling price per unit was $152, the variable costs per unit were $92, and the fixed costs were $574,500. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Naylor Company is under pressure from stockholders to increase net income by $62,000 in 2017. Collapse question part (a) Correct answer. Your answer is correct. Compute the number of units sold in 2016. (Round answer to 0 decimal places, e.g. 1,225.) Entry field with correct answer 12102 units Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT Attempts: 1 of 5 used Collapse question part (b) Incorrect answer. Your answer is incorrect. Try again. Compute the number of units that would have to be sold in 2017 to reach the stockholders’ desired profit level. Entry field with incorrect answer 13122 units Click if you would like to Show Work for this question: Open Show Work

Solution

Req a: Contribution margin per unit: Selling price 152 Less: Variable cost 92 Contribution margin per unit: 60 Total contribution Fixed cost 574500 Add: Net income 151600 Total contribution 726100 Divide: Contribution per unit 60 Number of units sold in 2016 12102 Req b: Contribution margin per unit: Selling price 152 Less: Variable cost 92 Contribution margin per unit: 60 Total Desired contribution Fixed cost 574500 Add: Desired Net income 213600 Total contribution 788100 Divide: Contribution per unit 60 Number of units to be sold in 2017 13135