Help Save Exit Submit Check my work 9 in Corporation has a

Help Save & Exit Submit Check my work 9 in Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit The company\'s monthly fixed expense is $32,600 10 points Required: Calculate the unit sales needed to attain a target profit of $6,250 2. Calculate the dollar sales needed to attain a target profit of $8.000. (Round your answer to the nearest whole number) Boock Hine 1 Units sales to attain target profi 2 Dollar sales to attain target pro Pint eterences

Solution

1. Unit sales to attain target profit 555 2. Dollar sales to attain target profit $81,200 Working: 1. Value % Unit selling price A 140 100% Unit variable cost B 70 50% Unit contribution margin (A-B) C 70 50% Fixed expenses 32600 Target profit 6250 Unit sales to attain target profit = (Fixed expenses+ Target profit) / Unit contribution = (32,600+6,250) / 70 = 555 2. Fixed expenses 32600 Target profit 8000 Dollar sales to attain target profit = (Fixed expenses+ Target profit) / Contribution margin % = (32,600+8,000) / 50% = $81,200 2-a Total contribution margin 111800 Total contribution margin increases by 1075 Workings: Per unit % Selling price 65 100% Variable expenses 39 60% Contribution margin 26 40% Sales units 4300 Total sales 279500 Variable expenses 167700 Contribution margin 111800 With higher quality components Sales go up by 25% (4300 x 125%) 5375 Unit variable expenses go up by $5.00 Revised unit variable expenses 44 Sales units 5375 Per unit Total Selling price 65 349375 Variable expenses 44 236500 Contribution margin 21 112875 Total contribution margin increases by(112875-111800) by $1,075.00