Homework Answers
Projected sales = 12,000 units
Sales = $960,000
Variable cost = $600,000
Total fixed cost = $300,000
Selling price per unit = Sales/Number of units
= 960,000/12,000
= $80
Variable cost per unit = Variable cost/Number of units
= 600,000/12,000
= $50
Contribution margin per unit = Selling price per unit - Variable cost per unit
= 80 - 50
= $30
9.
Number of units to be sold to earn target income = (Fixed cost + Target income)/Contribution margin per unit
= (300,000 + 150,000)/30
= 450,000/30
= 15,000 units
Correct option is (A)
10.
target profit = $20,000
Number of units sold = 10,000
Selling price per unit = ?
Let the selling price per unit = $K
Profit = Sales - variable cost - Fixed cost
20,000 = 10,000K - 10,000 x 50 - 300,000
10,000K = 820,000
K = $82
Selling price per unit = $82
Correct option is (C)
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