4. Calculation of fixed costs at maximum selling price, to achieve desired profi

Question

4. Calculation of fixed costs at maximum selling price, to achieve desired profit. Target Sales Units = ( FC P ) CM per Unit 15,000 units = ( FC $251,000 ) Multiplying both sides of the equation by $60.0 * , we get: 15,000 units = FC $251,000 FC = ( 15,000 ) $251,000 FC = $100,000 Total fixed costs allowed $100,000 Less original fixed cost estimate 92,400 Additional dollars available for advertising $7,600

4. Calculation of fixed costs at maximum selling price, to achieve desired profit. Target Sales Units = ( FC P ) CM per Unit 15,000 units = ( FC $251,000 ) Multiplying both sides of the equation by * , we get: 15,000 units = FC $251,000 FC = ( 15,000 ) $251,000 FC = $100,000 Total fixed costs allowed $100,000 Less original fixed cost estimate 92,400 Additional dollars available for advertising $7,600

Explanation / Answer

Answer:

Target Sales Units = ( FC + P )/ CM per Unit

15000 units=(FC+251000)/60

900000=60 FC+15060000

60 FC=14160000

FC=236000

Total fixed costs allowed $236,000

Less original fixed cost estimate 92,400

Additional dollars available for advertising $143600

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