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I selling price per unit variable costs per unit number of units sold B23a-Yz Company produces and sells four products. Information about these products
I selling price per unit variable costs per unit number of units sold B23a-Yz Company produces and sells four products. Information about these products for August is given below: Product #1 $74 Product #2 $88 $39 $46 2,800 2,900 Product #3 Product #4 selling price per unit $81 $107 variable costs per unit $62 $ 73 number of units sold 5,600 3,700 The fixed costs for August amounted to $253,120. In order to improve profitability, B23a-Yz Company made the following changes in September: 1. Adjusted the selling price of Product # 2. 2. Automated a portion of the production process related to Product # 2. This reduced the variable costs of Product #2 by $7 per unit. 3. Increased the advertising for Product #2 by $145,424. These changes resulted in the number of units of Product #2 that were sold doubling. However, these changes also resulted in the sales of Product #1 decreasing by 30% as some customers started buying Product #2 instead of Product # 1. Assume the sales of Product #3 and Product #4 were not impacted by these changes. Calculate the selling price per unit for Product #2 needed in September in order for the September net income to be 20% larger than the August net income.
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