Ahmad Company had $125,000 of net income in 2015 when the selling price per unit was $100, the variable costs per unit were $60, and the fixed costs were $475,000. Management expects per unit data and total fixed costs to remain the same in 2011. The president of Ahmad Company is under pressure from stockholders to increase net income by $75,000 in 2016.
Required:
(a) Compute the number of units sold in 2015.
(b) Compute the number of units that would have to be sold in 2016 to reach the stockholders' desired profit level.
(c) Assume that Ahmad Company sells the same number of units in 2016 as it did in 20105. What would the selling price have to be in order to reach the stockholders' desired profit level.