Question

Lin Corporation has a single product whose selling price is $134 per unit and whose variable expense is $67 per unit. The company's monthly fixed expense is $31,750. Required: 1. Calculate the unit sales needed to attain a target profit of $8,450. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $9,700. (Round your intermediate calculations to the nearest whole number.) units 1. Units sales to attain target profit 2. Dollar sales to attain target profit

Answer 1

1.

Profitability Statement
Let x be the number of units.
Particulars	$
Selling Price per unit	134
Less:
Variable cost per unit	(67)
Contribution per unit	67
Contribution Value ($)	67x
Less:
Fixed Costs	31,750
Profit	8,450
Contribution - Fixed Cost = Profit
Therefore,
67x - 31750 = 8450
67X = 40,200
x = 600 units Unit sales to attain target profit of $8,450 = 600 units

2.

Profitability Statement
Let x be the numer of units.
Particulars	$
Selling Price per unit	134
Less:
Variable cost per unit	(67)
Contribution per unit	67
Contribution Value ($)	67x
Less:
Fixed Costs	31,750
Profit	9,700
Contribution - Fixed Cost = Profit
Therefore,
67x - 31750 = 9700
67X = 41,450
x = 619 units (rounded to nearest whole number)
Sales Value = 619 units * $134 per unit
Dollar Sales to attain target profit of $9,700 = $ 82,946

Note: Answer to part 2 of question has been answered independent of part 1.