Blanchard Company manufactures a single product that sells for $184 per unit and

Question

Blanchard Company manufactures a single product that sells for $184 per unit and whose total variable costs are $138 per unit. The company's annual fixed costs are $699,200. Management targets an annual pretax income of $1150,000. Assume that fixed costs remain at $699,200. (1) Compute the unit sales to earn the target income. Units to Achieve Target Units to achieve target Choose Numerator: Choose Denominator: 2) Compute the dollar sales to earn the target income. Choose Numerator: Choose Denominator: -Dollars to Achieve Target Dollars to achieve target

Explanation / Answer

Calculate following :

Compute the unit sales to earn the target income Choose numerator / Choose denominator = Units to achieve target (fixed cost+Target income) / Contribution margin per unit = Units to achieve target (699200+1150000) / (184-138) = 40200 Units Compute the Dollar sales to earn the target income Choose numerator / Choose denominator = Dollars to achieve target (fixed cost+Target income) / Contribution margin ratio = Dollars to achieve target (699200+1150000) / 0.25 = 7396800

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