the More Company have 12% operating income per unit on the sales. price per unit. The...

the More Company have 12% operating income per unit on the sales. price per unit. The
managerial . reported that the target price is $750 per unit.
1‘ Compute the target operating income per unit
2. It" the company would like to have total profit to be $450,000, how many units, would they have to
sell given the desired 12% operating income per unit?
3 Compute the target cost per unit at the 12% target operating income per unit.
t It the company decided that it needed to earn 15% operating income per unit, what would the
new mst per unit have to be, assuming the price is $750?
5. It the mmpany decided that it needed to earn 30% operating income per unit, what would the
new cost per unit have to be, assuming the price is $750?
0. lt‘ the company decided it needed to earn a 30% operating income per unit but it realized that the
lowest it could reduce per unit costs is $575, what would the new target price have to be to
achieve the desired operating profit?

Expert Solution

1
Target Price per Unit	750
Target operating income per unit(750*12%)	90

2
Target Profit	450,000
Target operating income per unit(750*12%)	90
Number of Units	5,000

3
Target Price per Unit	750
Target operating income per unit(750*12%)	90
Target Cost per Unit	660

4
Target Price per Unit	750.00
Target operating income per unit(750*15%)	112.50
Target Cost per Unit	637.50

5
Target Price per Unit	750.00
Target operating income per unit(750*30%)	225.00
Target Cost per Unit	525.00

6
Target Cost per Unit	575.00
Target Profit(575/70*30)	246.43
Target Price per Unit	821.43

Please note below bold line after part 3 in question: I have assumed that is asking Cost per Unit. If it is asking about something else please comment.

t It the company decided that it needed to earn 15% operating income per unit, what would the
new mst per unit have to be, assuming the price is $750?

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