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Sales in 2024 units eTextbook and Media (b) Attempts: 1 of 10 user Compute the number of units that would have to be sold in 2025 to reach the stockholders' desired net income. Units needed in 2025 New unit selling price \$ unit selling price have to be in order to reach the stockholders' desired net income, assuming the unit variable costs and fixed costs remain at 2024 levels? (c) eTextbook and Media

Ask by Ellis Haynes. in the United States
Feb 28,2025

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Tutor-Verified Answer

Answer

To reach the desired net income in 2025, you need to sell a certain number of units based on the current selling price, variable costs, and fixed costs. However, the exact number of units and the new selling price cannot be determined without specific values for the desired net income, unit variable costs, fixed costs, and the current unit selling price.

Solution

To solve this problem, we need to extract the known conditions and then compute the required units to be sold in 2025 to reach the desired net income. However, the problem statement does not provide specific numerical values for the desired net income, unit variable costs, fixed costs, or the current unit selling price. Let's outline the steps we would take if we had those values: 1. **Identify Known Values:** - Desired net income (let's denote it as \( NI \)). - Current unit selling price in 2024 (let's denote it as \( P \)). - Unit variable costs in 2024 (let's denote it as \( VC \)). - Fixed costs in 2024 (let's denote it as \( FC \)). - Number of units sold in 2024 (let's denote it as \( U_{2024} \)). 2. **Calculate Contribution Margin:** The contribution margin per unit can be calculated as: \[ CM = P - VC \] 3. **Calculate Total Contribution Margin Needed:** To find the total contribution margin needed to achieve the desired net income, we can use the formula: \[ TCM = NI + FC \] 4. **Calculate Required Units to be Sold:** The number of units that need to be sold in 2025 can be calculated using: \[ U_{2025} = \frac{TCM}{CM} \] 5. **Determine New Selling Price (if needed):** If we need to find the new unit selling price to reach the desired net income, we can rearrange the contribution margin formula: \[ P_{new} = \frac{NI + FC}{U_{2025}} + VC \] If you can provide the specific values for the desired net income, unit variable costs, fixed costs, and the current unit selling price, I can perform the calculations for you.

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Bonus Knowledge

To understand how to calculate the number of units needed to be sold in 2025, it’s crucial to first identify the stockholders' desired net income, fixed costs, and variable costs per unit from 2024. You'd typically use the formula: (Selling Price per Unit - Variable Cost per Unit) × Number of Units - Fixed Costs = Desired Net Income. This will guide you in figuring out the necessary sales figure (units) while keeping costs consistent. As for the unit selling price needed to achieve the desired net income, this can be derived from rearranging the previous equation. Once you've calculated the number of units, you can determine the desired unit price using the formula: (Fixed Costs + Desired Net Income) / Number of Units + Variable Cost per Unit. Adjusting your unit price and keeping an eye on the market dynamics can help ensure you hit that desired income target!

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