Green Company sells its single product for $75 per unit. Variable costs are $54 per unit and the fixed costs total $428,400. During 2026, the company sold 27,900 units of this product to customers. In order to improve profitability, Green Company made the following changes in 2027: 1. increased the selling price of the product by 4% 2. a portion of the production process was automated which reduced variable costs by $2 per unit but added an additional fixed cost of $43,000 per year 3. increased the product's advertising by $60,000 Calculate the number of units of this product that Green Company must sell in 2027 in order to earn a net income that is 50% greater than the net income that was earned in 2026.
Green Company sells its single product for $75 per unit. Variable costs are $54 per unit and the fixed costs total $428,400. During 2026, the company sold 27,900 units of this product to customers. In order to improve profitability, Green Company made the following changes in 2027: 1. increased the selling price of the product by 4% 2. a portion of the production process was automated which reduced variable costs by $2 per unit but added an additional fixed cost of $43,000 per year 3. increased the product's advertising by $60,000 Calculate the number of units of this product that Green Company must sell in 2027 in order to earn a net income that is 50% greater than the net income that was earned in 2026.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Green Company sells its single product for $75 per
unit. Variable costs are $54 per unit and the fixed
costs total $428,400. During 2026, the company sold
27,900 units of this product to customers.
In order to improve profitability, Green Company
made the following changes in 2027:
1. increased the selling price of the product by 4%
2. a portion of the production process was automated
which reduced variable costs by $2 per unit but
added an additional fixed cost of $43,000 per year
3. increased the product's advertising by $60,000
Calculate the number of units of this product that
Green Company must sell in 2027 in order to earn a
net income that is 50% greater than the net income
that was earned in 2026.
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