Question

Lin Corporation has a single product whose selling price is $120 per unit andl whose variable expense is $80 per unit. The company's monthly fixed expense is $50.000. Required: 1. Calculate the unit sales needed to attain a target profit of $10,000. 2. Calculate the dollar sales needed to attain a target proflt or $15,000 (For all requirements, do not round intermedlate ealculations.) Units sales to attain target profit Dollar sales to atain target 10000四 195000

Answer 1

Requirement 1

Units to be sold to attain target profit of $10000= 1500 Units

Working

Sale Price per unit	$               120.00
Variable Cost per Unit	$                 80.00
Unit Contribution	$                 40.00

Fixed Cost	$         50,000.00
Expected annual profits	$         10,000.00
Total contribution required	$         60,000.00
Unit contribution	$                 40.00
No. of units to earn target profit	1,500

.

Dollar sales to attain profit of $15000= $195,000

Fixed Cost	$         50,000.00
Expected annual profits	$         15,000.00
Total contribution required	$         65,000.00
Unit contribution (50-30)	$                 40.00
No. of units to earn target profit	1,625
Amount of Sale dollars	$     1,95,000.00