Reference no: EM132553061

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 1: 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 2: 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%.)