Joan Company produces and sells four products. Information about these products for the month of November...
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Joan Company produces and sells four products. Information about these products for the month of November is provided below: -selling price per unit variable costs per unit number of units sold Product #1 $177 $101 2,300 Product #3 $93 Product #2 $113 $ 84 5,800 Product #4 $126 $78 4,500 selling price per unit variable costs per unit number of units sold $ 58 3,600 The fixed costs for November totaled $260,300. Joan Company made the following changes in December: 1. Decreased the selling price of Product #1. 2. Increased the advertising of Product #1 by $54,260. 3. Automated a portion of the production process related to Product # 1. This change reduced the variable costs of Product #1 by $4 per unit. These changes resulted in the sales volume of Product #1 doubling. However, this also resulted in some customers currently buying Product #3 to start buying Product #1 instead. Thus, the sales of Product #3 decreased by 10%. Assume the sales of Product #2 and Product #4 were not impacted by these changes. Calculate the selling price per unit for Product #1 that is needed in December in order for the December net income to be 20% larger than the November net income. Joan Company produces and sells four products. Information about these products for the month of November is provided below: -selling price per unit variable costs per unit number of units sold Product #1 $177 $101 2,300 Product #3 $93 Product #2 $113 $ 84 5,800 Product #4 $126 $78 4,500 selling price per unit variable costs per unit number of units sold $ 58 3,600 The fixed costs for November totaled $260,300. Joan Company made the following changes in December: 1. Decreased the selling price of Product #1. 2. Increased the advertising of Product #1 by $54,260. 3. Automated a portion of the production process related to Product # 1. This change reduced the variable costs of Product #1 by $4 per unit. These changes resulted in the sales volume of Product #1 doubling. However, this also resulted in some customers currently buying Product #3 to start buying Product #1 instead. Thus, the sales of Product #3 decreased by 10%. Assume the sales of Product #2 and Product #4 were not impacted by these changes. Calculate the selling price per unit for Product #1 that is needed in December in order for the December net income to be 20% larger than the November net income.
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To calculate the selling price per unit for Product 1 needed in December for a 20 larger net income compared to November lets break down the informati... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118033890
3rd Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
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