Naylor Company had $210,000 of net income in 2021 when the unit selling price was $140, the unit variable costs were $90, and the fixed costs were $570,000. Management expects per unit data and total fixed costs to remain the same in 2022. The president of Naylor Company is under pressure from stockholders to increase net income by $62,400 in 2022.

Instructions

a. Compute the number of units sold in 2021.

b. Compute the number of units that would have to be sold in 2022 to reach the stockholders’ desired net income.

c. Assume that Naylor Company sells the same number of units in 2022 as it did in 2021. What would the selling price have to be in order to reach the stockholders’ desired net income, assuming the unit variable costs and fixed costs remain at 2021 levels?