rse BUS 210 IntrocMcGrawHill Education x y M Chapter 3 Home

rse: BUS 210 - IntrocMcGraw-Hill Education( x y M Chapter 3 Homework x ezto.mheducation.com/hm.tpx?--0.85432905674 11093_1516756726767 O Getting Started Imported From IE Imported From Firef Domain Manager Cambridge, Inc., is considering the introduction of a new calculator with the following price and cost characteristics Sales price Variable costs Fixed costs $ 350 per unit 125 per unit 226,000 per month Required: (a) What number must Cambridge sel per month to break even? (Round up your final answer to the nearest whole dollar.) Break even sales in unts (b) What number must Cambridge sell to make an operating profit of $172.000 for the month? (Round up your final answer to the nearest whole doliar.) Number of units sold References eBook & Resources

Solution

1. number of units to be sold to break even = fixed cost/ contribution per unit

here,

contribution per unit

=> sale price - variable cost per unit

=>$350 - 125

=>$225.

break even units = $226,000 / 225

=>1005 units....(rounding to nearst whole number).

b number of units to be sold to get a desired profit of $172,000

=>(fixed cost + desired profit) / contribution per unit

=>($226,000 + 172,000) / $225

=>$398,000 / $225

=> 1,769 units.......(rounded to nearest whole number).