Homework Answers
1. Break even units = Fixed cost / CM per unit.
>> Cm per unit = 10 -7.5 = $ 2.5.
Break even units = $ 24000 / $ 2.5 = 9600 units.
2. Target units = ( Fixed cost + Desired profit ) / CM per unit = ( $ 24000 + 35000 ) / 2.5 = 23600 units.
3. Fixed cost = 24000 + 20000 = 44000.
Target units = ( 44000 + 70000 ) / 2.5 = 45600 Units.
4. Target units = ( Fixed cost + Desired profit ) / CM per unit
>> 10000 = ( 24000 + 65000 ) / CM per unit.
>> CM per unit = 8.9.
>> Required Selling price = 8.9 + 7.5 = $ 16.40.
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