Question

A firm expects to sell 25,200 units of its product at $11.20 per unit and to incur variable costs per unit of $6.20. Total fi
Watson Company has monthly fixed costs of $74,000 and a 50% contribution margin ratio. If the company has set a target monthl
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Answer #1

1. Total Contribution margin

= (11.20-6.20)*25,200

= 126,000

2. Sales needed = (Fixed costs+Target profit) /Contribution margin ratio

= (74,000+14,100)/50%

= 176,200

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