In 2019, X Company sold 5,250 units of its only product. Total revenue was $1,395,975, total...

Question

Question

In 2019, X Company sold 5,250 units of its only product. Total revenue was $1,395,975, total variable costs were $576,975, an

Answer 1

Answer #1

Sales price per unit=(1,395,975/5250)=$265.9 per unit

Variable cost per unit was=(576975/5250)=$109.9 per unit

Hence Variable cost per unit now=109.9-4.7=$105.2 per unit

Contribution margin=Sales-Variable cost

=(265.9-105.2)=$160.7 per unit

New fixed costs=732000-23300=$708700

Hence target contribution margin=Fixed cost+Target profits

=36000+708700=$744700

Hence units to be sold=744700/160.7

=4634.10 units(Approx).

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Answer 2

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