Pittsboro corporation produces and sells a single product. data for that product are: sales price per unit $590 variable cost per unit $190 fixed expenses for the month $1,200,000 currently selling 4000 unitsmanagement is discussing increasing the price to $625 to cover an increase in fixed expenses of $89,000. management believes they might lose 2% of sales per month. how many units per month would the company have to sell to maintain its current level of operating income?

The company will need to sale 3,883 units to maintain its current operating income of 400,000

Explanation:

We will calculate the point at which the company mantains his current income in units at the new scenario:

Where:

625 - 190 = 435 each units contributes this amount to afford the fixed cost and make a gain.

Current income: contribution x units sold - fixed cost

                             (590-190) x 4,000 - 1,200,000 = 400,000

(1,200,000 + 89,000 + 400,000) / 435 = 3,882.75862 = 3,883 units

The company will need to sale 3,883 units to maintain its current operating income of 400,000

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20

answer; /// the use of a bank credit card to make purchase;