Answer:
The company's projected net income is $64,000
Explanation:
We know that,
The net income = Sales - variable cost - fixed cost
In the question, the fixed cost is not given, so first we have to find out
Putting the values to the above formula,
So, the fixed cost would be
$60,000 = $143,000 - $77,000 - fixed cost
$60,000 = $66,000 - fixed cost
So, the fixed cost = $6,000
The variable cost = Number of units sold × variable costs per unit
= 2,200 units × $35
= $77,000
The price per unit would be equal to
= (Total sales) ÷ (number of units sold)
= $143,000 ÷ 2,200 units
= $65
New sale per unit = $65 + $5 = $70
New units = 2,200 units - 200 units = 2,000 units
So, the new sales would be
= Sale price per unit × number of units sold
= $70 × 2,000 units
= $140,000
The variable cost = Number of units sold × variable costs per unit
= 2,000 units × $35
= $70,000
So, the net income would be
= $140,000 - $70,000 - $6,000
= $64,000
