Question

cma = 11.5 2. Anglico's most recent income statement is given below. Sales (8,000 units) $160,000 Joe Less variable expenses (68,000) 8.5 per unit Contribution margin 92,000 Less fixed expenses (50.000) Net income $42,000 Required: (10 points) Compute how many units must be sold to break even. Compute how many units must be sold to achieve operating income of $60,000. Compute the revenue needed to achieve an after tax income of $30,000 given a tax rate of 30%. 4,348 9566 $42.000 c

Answer 1

	Selling price per unit	$160,000	$20	Per unit
	Variable expense per unit	$68,000	$9	Per unit
	Contribution margin per unit	$92,000	$12	Per unit
	Fixed Cost	$50,000
	Net Income	$42,000
	CM Ratio	57.50%
1	Break-even in units sales
	(Fixed expenses/Contribution margin per unit)	4,348	units
	($50,000 / $12)
2	Target Units in sales	9,565	units
	(Fixed cost + Target Income)/Contributin margin per unit
	[($50,000 + $60,000)/ $12]
3	Target Units in sales	$161,491
	(Fixed cost + Target Income)/Contributin margin ratio
	[($50,000 + $30,000/.7)/ 57.50%]