Reference no: EM132553070

YUX Corporation sells a single product for $50. Its management estimates the following revenues and costs for the year 2020:

Net sales                          $525,000

Selling expenses-variable         $20,300

Direct materials                         148,000

Selling expenses-fixed                    18,600

Direct labour                            65,900

Administrative expenses-variable        10,000

Manufacturing overhead-variable            18,300

Administrative expenses-fixed                 10,800

Manufacturing overhead-fixed                   17,400

Question A. Determine the percentage increase in annual profits if YUX Corporation increases its selling price by 20% and all other factors (including demand) remain constant. (Round answer to 2 decimal places, e.g. 15.25%.)

Question B. Assume the price remains at $40 per unit and variable costs remain the same per unit, but fixed costs increase by 20% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual profit calculated in part (b). (Round answer to 2 decimal places, e.g. 15.25%.)