Assume the unit contribution margin is $10. Sales are $1,000,000, variable costs are $200,000 and fixed...
Assume the unit contribution margin is $10. Sales are $1,000,000, variable costs are $200,000 and fixed costs are $700,000. How many units must be sold to earn a profit of $100,000?
a. 80,000
b. 10,000
c. 90,000
d. 100.000
Homework Answers
Target contribution margin=Fixed cost+Target profits
=(700,000+100,000)=$800,000
Hence target sales=$800,000/contribution margin per unit
800,000/10
=80,000 units
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