In: Accounting
Total Units for information given |
7000 |
Fixed Cost per Unit |
$200 |
Selling Price per Unit |
$325 |
Variable Costs per Unit |
$225 |
Target Operating Income |
$100,000 |
Question 1
Solution
Variable cost per unit = $1.95 per unit
Working
Total cost | $ 378,000.00 |
Less: Fixed cost | $ 300,000.00 |
Total variable cost | $ 78,000.00 |
Variable cost per unit (78000/40000) | $ 1.95 per unit |
Question 2
Solution
Units to be sold = 15000 units
Working
A | Sale Price per unit | $ 325.00 |
B | Variable Cost per Unit | $ 225.00 |
C=A x B | Unit Contribution | $ 100.00 |
D | Total Fixed cost + desired profit | $ 1,500,000.00 |
E=D/C | Units to be sold | 15,000 |