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22 December, 20:22

Ivanhoe Company had $177,900 of net income in 2019 when the selling price per unit was $154, the variable costs per unit were 598, and the fixed costs were $572.500. Management expects per unit data and total fixed costs to remain the same in 2020. The president of Ivanhoe Company is under pressure from stockholders to increase not income by $93.800 in 2020. (a) Compute the number of units sold in 2019.

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  1. 22 December, 20:27
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    13,400 units

    Explanation:

    Data given in the question

    Sale price = $154

    Variable cost = $98

    Fixed cost = $572,500

    Net income = $177,900

    So, Let us assume the number of units sold in 2019 be X

    (Sales price - Variable costs) * sales units - Fixed cost = Net income

    ($154 - $98) * X - $572,500 = $177,900

    $56 * X - $572,500 = $177,900

    $56 * X = $177,900 + $572,500

    $56 * X = $750,400

    X = 13,400 units

    Hence, the number of units sold in 2019 is 13,400 units
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