The following information is for a product manufactured and sold by Rivera Corporation:
Sales price per unit, $30
Variable cost per unit, $20
Total fixed costs, $200,000
Last year, Rivera earned a profit of $60,000
Required:
1) How many units did Rivera sell last year?
2) Rivera's managers are considering decreasing the sales price to $28 in an effort to increase market share. Also, the company wants a profit of $80,000. How many units would it have to sell at the lower selling price to achieve this target.