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XYZ Company reported the following information for June: contribution margin per unit ......... $24 fixed costs...

XYZ Company reported the following information for June:

contribution margin per unit .........  $24
fixed costs ..........................  $180,000
variable cost per unit ...............  $36

Calculate the number of units XYZ Company needed to sell in
June in order to earn a target profit equal to 24% of sales.
business   accounting   
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Answer #1
Contribution per unit $          24
Variable Cost per unit $          36
Hence,Sale Price per unit $          60
Contribution Margin in % =24/60 40%
Profit Margin Required 24%
We know that,
Contribution 40%
Less: Profit Margin 24%
Fixed Cost 16%
Hence, Fixed Cost $180,000 represent 16% of Sales.
Therefore, Sales =Fixed Cost/Fixed Cost in %
=180000/16%
$       11,25,000
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