Carolina Timber, Inc. produces flooring material. The monthly fixed costs are $10,000 per month. The unit sales price is $75, and variable cost per unit is $35. How many units should Carolina sell in order to earn $10,000 as operating income? Answer: Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit Unit contribution margin = Net sales revenue per unit - Variable costs per unit Unit contribution margin = $75 - $35 = $40 550 Units 500 units 1200 units 400 units
Carolina Timber, Inc. produces flooring material. The monthly fixed costs are $10,000 per month. The unit sales price is $75, and variable cost per unit is $35. How many units should Carolina sell in order to earn $10,000 as operating income? Answer: Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit Unit contribution margin = Net sales revenue per unit - Variable costs per unit Unit contribution margin = $75 - $35 = $40 550 Units 500 units 1200 units 400 units
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2BE: Contribution margin Waite Company sells 250,000 units at 120 per unit. Variable costs are 78 per...
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Carolina Timber, Inc. produces flooring material. The monthly fixed costs are $10,000 per month. The unit sales price is $75, and variable cost per unit is $35. How many units should Carolina sell in order to earn $10,000 as operating income?
Answer: Required sales in units = (Fixed costs + Target profit) / Contribution margin per unit
Unit contribution margin = Net sales revenue per unit - Variable costs per unit
Unit contribution margin = $75 - $35 = $40
550 Units |
||
500 units |
||
1200 units |
||
400 units |
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