The following is information concerning a product manufactured by Ames Brothers.
Sales price per unit | $ | 65 | |
Variable cost per unit | 43 | ||
Total fixed manufacturing and operating costs (per month) | 430,000 | ||
a. Determine the unit contribution margin.
b. Determine the number of units that must be sold each month to break even. (Round your answer to the nearest whole number.)
c. Determine the number of units that must be sold to earn an operating income of $234,000 per month. (Round your answer to the nearest whole number.)
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a.unit contribution margin=Sales-Variable cost
=65-43
=$22 per unit
b.Breakeven=Fixed cost/contribution margin
=430,000/22
=19545 units(Approx).
c.Target contribution margin=Fixed cost+Target profit
=430,000+234,000=$664000
Hence target units 664000/22
=30182 units(Approx).
The following is information concerning a product manufactured by Ames Brothers. Sales price per unit $...
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