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Blanchard Company manufactures a single product that sells for $180 per unit


Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $126 per unit. The company's annual fixed costs are $842,400. Management targets an annual pretax income of $1,350,000. Assume that fixed costs remain at $842.400. 


(1) Compute the unit sales to earn the target income.

2) Compute the dollar sales to earn the target income. 

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Answer #1

1)

Fixed cost plus pretax income / Contribution margin per unit = Units to achieve
2,192,400 54 40,600

2)

Fixed cost plus pretax income / Contribution margin ratio = Dollars to achieve
2,192,400 30% 7,308,000
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