Question

# Lin Corporation has a single product whose selling price is \$130 per unit and whose variable...

Lin Corporation has a single product whose selling price is \$130 per unit and whose variable expense is \$65 per unit. The company’s monthly fixed expense is \$32,550.

Required:

1. Calculate the unit sales needed to attain a target profit of \$3,850.

2. Calculate the dollar sales needed to attain a target profit of \$8,100. (Round your answer to the nearest whole number.)

• Working
 A Selling Price \$130 per unit B Variable Expenses \$65 per unit C = A - B Contribution margin \$65 per unit D =(C/A) x 100 Contribution margin ratio 50%

• Requirement 1
 A Total Fixed expenses \$32,550 B Target Profits \$3,850 C = A+B Total Contribution margin required \$36,400 D Contribution margin per unit \$65 E = C/D Unit sales needed to attain target profit 560 units = Answer

• Requirement 2
 A Total Fixed expenses \$32,550 B Target Profits \$8,100 C = A+B Total Contribution margin required \$40,650 D Contribution margin ratio 50% E = C/D Dollar sales needed to attain target profit \$81,300 = Answer