Question

Saved Help Save & Exi Checl Lin Corporation has a single product whose selling price is $120 per unit and whose variable expense is $80 per unit. The company's monthly fixed expense is $50,000 nts Required: 1. Calculate the unit sales needed to attain a target profit of $10,000. 2. Calculate the dollar sales needed to attain a target profit of $15,000. Skipped (For all requirements, do not round intermediate calculations.) eBook Hint 1. Units sales to attain target profit 2. Dollar sales to attain target profit Print ferences

Answer 1

1 Units sales to attain target profit 2 Dollar sales to attain target profit 1500 units 195,000 Units to be sold to attain desired profit = (Total fixed cost + Desired profit) / Contribution per unit Contribution per unit = Selling price - Variable cost per unit = 120 - 80 = 40 per unit Units to be sold to attain 10,000 profit = (50,000 + 10,000) / 40 = 1500 units Dollar sales to attain desired profit Contribution ratio = (Total fixed cost + Desired profit) / Contribution ratio = Contribution per unit / Selling price = 40/120 = 33.33% = (50,000 + 15,000) / 33.33% = 195,000.00 Dollar sales to attain 15,000 profit