Q16

please solve this and show all the steps and all formulas

Argentina Partners is concerned about the possible eflects of inflation on its operations Presently. the company sells 60,000 units for $30 per unit The variable production costs are $15, and fixed costs amount to $700,000 Production engineers have advised management that they expect unit labor costs to rise by 15 percent and unit materials costs to rise by 10 percent in the coming year Or the $15 vanable costs, 50 percent are from labor and 25 percent are from materials. Variable overhead costs are expected to increase by 20 percent Sales prices cannot increase more than 10 percent. It is also expected that fixed costs will rise by 5 percent as a result of increased taxes and other miscellaneous fixed charges The company wishes to maintain the same level of proft in real dollar terms It is expected that to accomplish this objective, profits must ncrease by 6 percent during the year. Required a. Compute the volume in units and the dollar sales level necessary to maintain the present prot level, assuming that the maximum price increase is implemented. (Do not round calculations. Round up your answer for "Volume in units" to th intermediate e nearest whole number and round your answer for "Sales" to the nearest whole dollar amount) Volume in units 59.365 Sales 5900 000 ming that the maximum price increase is implemented (Do not round b. Compute the volume of sales and the dollar sales level ncessary to provide the 6 percent increase in profts, assu intermediate ealculations. wer for "Sales to the nearest whole dollar amount.) Round up your answer for "Volume in units to the nearest whole number and round your ans 60,127 Volume in units Sales S 1,984 191 to attain the 6 percent increase in profits? Calculate the new price. (Do not round intermediate c. It the volume of sales were to remain at 60 000 caleulatio ns. Round your answer to 2 decimal places.)