Pharoah Corporation sells a single product for $50. Its management estimates the following revenues and costs for
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Question:
Pharoah Corporation sells a single product for $50. Its management estimates the following revenues and costs for the year 2022: Net sales $560,000 Selling expenses—variable $22,400 Direct materials 100,800 Selling expenses—fixed 22,400 Direct labour 67,200 Administrative expenses—variable 11,200 Manufacturing overhead—variable 22,400 Administrative expenses—fixed 11,200 Manufacturing overhead—fixed 33,600 Assume the price remains at $50 per unit and variable costs remain the same per unit, but fixed costs increase by 20% annually.
Calculate the percentage increase in unit sales required to achieve the same level of annual operating income calculated in part second part.
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