Homework Answers
| CALCULATION OF CONTRIBUTION MARGIN PER UNIT CONTRIBUTION MARIN RATIO | ||||
| PARTICULARS | Product | |||
| Selling Price Per Unit= | $ 120 | |||
| Less: Variable Cost Per Unit | $ 84 | |||
| Contribution Margin Per Unit | $ 36 | |||
| Contribution margin Ratio = $ 36 / $ 120 = | 30% | |||
| Target Profit = ( Fixed Cost + target Income ) / Contribution Margin per unit | ||||
| Target Profit = | ||||
| Fixed Cost = | $ 5,29,200 | |||
| Add: | "+ " | |||
| Target Income (Use as numerator) | $ 9,00,000 | |||
| Equal to = | $ 14,29,200 | |||
| Divide By | "/"By | |||
| Contribution margin Per unit (Use as denominator) | $ 36 | |||
| Equal to =Total Units | 39,700 | Units | ||
| Target Sales = ( Fixed Cost + target Income ) / Contribution Margin Ratio | ||||
| Target Profit = | ||||
| Fixed Cost = | $ 5,29,200 | |||
| Add: | "+ " | |||
| Target Income (Use as numerator) | $ 9,00,000 | |||
| Equal to = | $ 14,29,200 | |||
| Divide By | "/"By | |||
| Contribution margin Ratio (US as denominator) | 30% | |||
| Equal to =Total Sales in Dollars | 47,64,000 | |||
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