The Hartnett Corporation manufactures basebat bats wih Pudge

The Hartnett Corporation manufactures basebat bats wih Pudge Rodnguezs adograph stamped on them Each bat selts for $35 and has a variable cost of $22. There are $97,500 in txed costs nvolved in the production process b. Find the sales (in unts) needed to eam a proltit of $262,500 (Round your answer to the

Solution

Answer a.

Selling Price per unit = $35
Variable Cost per unit = $22

Contribution Margin per unit = Selling Price per unit - Variable Cost per unit
Contribution Margin per unit = $35 - $22
Contribution Margin per unit = $13

Breakeven Point in units = Fixed Costs / Contribution Margin per unit
Breakeven Point in units = $97,500 / $13
Breakeven Point in units = 7,500

Answer b.

Selling Price per unit = $35
Variable Cost per unit = $22

Contribution Margin per unit = Selling Price per unit - Variable Cost per unit
Contribution Margin per unit = $35 - $22
Contribution Margin per unit = $13

Sales Quantity Needed = (Fixed Costs + Desired Profit) / Contribution Margin per unit
Sales Quantity Needed = ($97,500 + $262,500) / $13
Sales Quantity Needed = $37,692