Question

Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The company’s monthly fixed expense is $32,600. Required: 1. Calculate the unit sales needed to attain a target profit of $6,250. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $8,000. (Round your intermediate calculations to the nearest whole number.)

Answer 1

Answer with working is given below

Selling price Variable cost Contribution margin per unit Contribution margin % (Contribution/Selling price)% (Total target/Contribution per unit) $140 $70 $70 50% 1 Units required to achieve target profit of $6,250 Fixed Cost $32,600 Profit $6,250 Total Target $38,850 A Contribution margin per unit Total units to achieve target (Total Target/Contribution per unit) $70 B 555 A/B 2 Sales dollars required to achieve target profit of $8,000 Fixed Cost $32,600 Profit $8,000 Total Target $40,600A Contribution margin % Total Sales dollars to achieve target (Total target/CM %) 50.00% B $81,200 A/B |