A manufacturer of medical supplies provides the following partial financial information: Total fixed costs: $35,000 Unit...

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Question

A manufacturer of medical supplies provides the following partial financial information: Total fixed costs: $35,000 Unit...

A manufacturer of medical supplies provides the following partial financial information:

Total fixed costs: $35,000
Unit selling price: $20.00
Unit variable cost: $15.00

Management has a target net income of $7,500. Compute the required sales in units to achieve the target net income.

		170,000 units
		1,500 units
		8,500 units
		7,000 units

business accounting

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Answer 1

Answer #1

8,500 units

Required sales in units	=	Target Contribution Margin	/	Contribution margin per unit
	=	$ 42,500	/	$ 5.00
	=	8,500 Units

Working:

# 1	Total fixed cost	$ 35,000
	Add target net income	$ 7,500

	Target Conttibution margin	$ 42,500

# 2	Unit selling price	$ 20.00
	Less Unit variable cost	$ 15.00

	Unit contribution margin	$ 5.00

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Answer 2

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A manufacturer of medical supplies provides the following partial financial information: Total fixed costs: $35,000 Unit...

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A manufacturer of medical supplies provides the following partial financial information: Total fixed costs: $35,000 Unit...

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Add Answer to: A manufacturer of medical supplies provides the following partial financial information: Total fixed costs: $35,000 Unit...

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