Question

produces a product with fixed costs of $54,100 and variable cost of $2.90 per unit. The $24,000 profit and believes it can sell 11,000 units of the product. Round your answer to 2 decimal places ed

Answer 1

answer 1
	target price =
	Fixed cost		54100
	Variable cost 11000*2.9		31900
	Desired profit =		24000
	total sales price		110000
	Unit sold =		11000
	Unit sales price =110000/11000		10	per unit
answer 2
	Sales price		60
	Contribution margin		10%
	Fixed cost		144000
	Therefore contribution margin =60*10%		6
	variable cost =60-6 = 54		54
a	Break even point in unit =Fixed cost / Contribution margin per unit
	=144000/6		24000	unit
	Break even point in Dollar =Fixed cost / Contribution margin %
	=144000/10%		1440000
b	Sales in Dollar =(Fixed cost+ 48000)/Contribution margin %
	=(144000+ 48000)/10%		1920000
	Sales in unit = 1920000/60		32000
c	Increase in sales price = 72
	revised contribution margin =72-54		18
	revised contribution margin %=18/72		25%
	Break even point in unit =Fixed cost / Contribution margin per unit
	=144000/18		8000	unit
	Break even point in Dollar =Fixed cost / Contribution margin %
	=144000/25%		576000