Mancine Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.?Sales (3,000 units)$150,000?Variable expenses 90,000?Contribution margin60,000?Fixed expenses 42,000?Net operating income $18,000Required:a. What is the break-even point in unit sales?b. Estimate how many units must be sold to achieve a target profit of $50,000.
What will be an ideal response?
a.
| ? | Selling price per unit ($150,000 ÷ 3,000 units) | $50 |
| ? | Variable cost per unit ($90,000 ÷ 3,000 units) | 30 |
| ? | Unit contribution margin | $20 |
Unit sales to break even = Fixed expenses ÷ Unit CM = $42,000 ÷ $20 per unit = 2,100 units
b. Unit sales to attain a target profit = (Target profit + Fixed expenses) ÷ Unit CM
= ($50,000 + $42,000) ÷ $20 per unit = $92,000÷ $20 per unit = 4,600 units
You might also like to view...
Valentina will only adopt new management techniques that have been thoroughly researched and shown to be effective. Valentina is using ______.
a. sociotechnical theory b. evidence-based management c. systems theory d. knowledge management
What can give rise to negligent-hiring lawsuits?
What will be an ideal response?
Which of the sciences listed below looks at the way groups behave and the way they communicate and exchange information?
a. Political science b. Sociology c. Social psychology d. Anthropology
BlueWink, a popular marketing firm, requires a mechanism to protect its confidential data and client details from hackers, cyber criminals, and other security threats. Which of the following should BlueWink use as a safeguard?
A. Expert systems B. Firewalls C. Cybermediaries D. Intranet