Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The company’s monthly fixed expense is $31,900. Required: 1. Calculate the unit sales needed to attain a target profit of $6,250. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $9,400. (Round your intermediate calculations to the nearest whole number.)

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abdulmajeedabiodunac abdulmajeedabiodunac · Answer 1 · 2020-03-29T03:40:05+02:00

Answer:

The sales unit to achieve a target profit of $6,250 is 545 units

The sales units to achieve to achieve a target profit of $9,400 is 590 units

Explanation:

The quantity at target profit=fixed cost+target profit/contribution per unit

fixed expense=$31,900

target profit $6,250

contribution per unit=$140-$70

=$70

unit sales at a target profit of $6,250=($31,900+$6,250)/$70

=545 sales units

fixed expenses $31900

target profit of $9400

contribution per unit is $70

unit sales at a target profit of $9,400=($31900+$9400)/$70

=590 sales unit