Manx Company had $150,000 of net income in 2012 when the selling price per unit was $150, the variable costs per unit were $90, and the fixed costs were $570,000. Management expects per unit data and total fixed costs to remain the same in 2013. The president of Manx Company is under pressure from stockholders to increase net income by $60,000 in 2013.
(a) Compute the number of units sold in 2012.
(b) Compute the number of units that would have to be sold in 2013 to reach the stockholders’ desired profit level.
(c) Assume that Manx Company sells the same number of units in 2013 as it did in 2012. What would the selling price have to be in order to reach the stockholders’ desired profit level?