SBD Phone Company sells its waterproof phone case for $108 per unit.

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SBD Phone Company sells its waterproof phone case for $108 per unit.

QS 18-9 CVP analysis and target income LO P2

SBD Phone Company sells its waterproof phone case for $108 per unit. Fixed costs total $227,000, and variable costs are $48 per unit. Compute the units of product that must be sold to earn pretax income of $203,500.

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Answer 1

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Answer #1

Required Contribution = Fixed Cost + Pre tax Income required

= $ 227000 + $ 203500

= $ 430,500

Contribution Margin Per Unit = Selling Price Per Unit - Variable Cost Per Unit

= $ 108 - $ 48

= $ 60

Units to be sold to achieve the target :

Numerator	/	Denominator	=	Units to achieve target
Required Contribution	/	Contribution Margin Per Unit	=	Units to achieve target
430500	/	60	=	7,175	Units

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Answer 2

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SBD Phone Company sells its waterproof phone case for $116 per unit. Fixed costs total $227,000,...

SBD Phone Company sells its waterproof phone case for $112 per unit.

SBD Phone Company sells its waterproof phone case for $106 per unit. Fixed costs total $242,000,...

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QS 21-6 Contribution margin per unit and break-even units LO P2 SBD Phone Company sells its...

SBD Phone Company sells its waterproof phone case for $108 per unit.

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