- All working forms part of the answer
- Requirement ‘a’
|
A
|
Sales Price per unit
|
$
355.00
|
|
B
|
Variable cost per unit
|
$
140.00
|
|
C = A - B
|
Contribution margin per unit
|
$
215.00
|
|
D
|
Fixed Cost
|
$
451,500.00
|
|
E=D/C
|
Break Even sales in units
|
2,100
|
Answer = 2,100 units = Break Even in
Units
|
A
|
Target Operating profits
|
$
279,500.00
|
|
B
|
Fixed Cost
|
$
451,500.00
|
|
C = A+B
|
Total contribution required for target operating
profits
|
$
731,000.00
|
|
D
|
Contribution margin per unit
|
$
215.00
|
|
E = C/D
|
No. of units to be sold to earn target operating
profits
|
3,400
|
Answer = 3400 units to be sold to earn
target operating profits of $ 279,500
