1. The following information is for a product of Primus Company:
Last year, the variable cost per unit was $22. Total fixed costs were $800,000. At a volume of 170,000
units, the company achieved a profit of $50,000.
What was the unit sales price for the product last year?
2. The following information is for a product manufactured and sold by Trinity Corporation:
Sales price per unit, $35
Variable cost per unit, $20
Total fixed costs, $300,000
Last year, Trinity earned a profit of $30,000.
(a) How many units did Trinity sell last year?
(b) Trinity's managers are considering decreasing the sales price to $30 in an effort to increase market share. Also, the company wants a profit of $80,000. How many units would it have to sell at the lower selling price to achieve this target?
Profit = Sales - Variable - Fixed Cost
Sales = 50000+ 170000*22 + 800,000 = $45,90,000
Unit Sale price = ...
The solution computes Primus Company unit sales price and Trinity Corp unit sales and target profit.