Help Save &Exit; Subm Check my work Corporation has a single product whose selli

Question

Help Save &Exit; Subm Check my work Corporation has a single product whose selling price is $135 per unit and whose variable expense is $81 per unit. The company's nthly fixed expense is $23,580. equired: Calculate the unit sales needed to attain a target profit of $4,500. (Do not round intermediate calculations,) Calculate the dollar sales needed to attain a target profit of $9,500. (Round your intermediate calculations to the nearest whole umber.) 520 1. Units sales to attain target profit 2. Dollar sales to attain target profit

Explanation / Answer

Contribution margin=Sales-Variable costs

=(135-81)=$54/unit

1.Target Contribution margin=Fixed cost+Target income

=(23580+4500)=$28080

Hence target units=(28080/54)=520

2.Target Contribution margin=(9500+23580)=$33080

Contribution margin ratio=Contribution margin/Sales

=(54/135)=0.4

Hence sales=(33080/0.4)=$82700.

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