Question
In: Accounting
Data concerning Cutshall Enterprises corporation's single product appear below: Note: fixed or variable Expenses is the...
Data concerning Cutshall Enterprises corporation's single product appear below: Note: fixed or variable Expenses is the same as fixed or variable costs.
Selling price per unit....$190.00
Variable expense per unit...$91.20
Fixed expenses per month...$424.840
the unit sales to attain the company 's monthly target profit of $16.000 is closest to:
A) 3,872
B)2,320
C)4,834
D)4,462
Solutions
Expert Solution
| Working notes: | |||
| CALCULATION OF CONTRIBUTION MARGIN PER UNIT | |||
| PARTICULARS | Product | ||
| Selling Price Per Unit= | $ 190.00 | ||
| Less: Variable Cost | $ 91.20 | ||
| Contribution Margin per unit | $ 98.80 | ||
| Solution: | |||
| Target Profit = ( Fixed Cost + target Income ) / Contribution Margin per unit | |||
| Target Profit = | |||
| Fixed Cost = | $ 4,24,840 | ||
| Add: | "+ " | ||
| Target Income = | $ 16,000 | ||
| Equal to = | $ 4,40,840 | ||
| Divide By | "/"By | ||
| Contribution marrgin per unit | $ 98.80 | ||
| Equal to = | 4,462 | Units | |
| Answer = Option D = 4,462 Units | |||
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