im trying to figure out some accounting questions Rush Company developed the fol

Question

im trying to figure out some accounting questions

Rush Company developed the following information for itsproduct:

                                                                                                       Per Unit

Salesprice                                                                          ?

Variablecost                                                                    $63

Contributionmargin                                                          30%        

Total fixedcosts                                                   $1,350,000

Instructions

Answer the following independentquestions and show computations using the contribution margintechnique to support your answers.

1.   How many units must be sold to break even?

2.   What is the total sales that must be generated forthe company to earn a profit of $60,000?

3.   If the company is presently selling 75,000 units,but plans to spend an additional $135,000 on an advertisingprogram, how many additional units must the company sell to earnthe same net income it is now making?

4.   Using the original data in the problem, compute anew break-even point in units if the unit sales price is increased20%, unit variable cost is increased by 10%, and total fixed costsare increased by $198,000.

i figured out that the price per unit is 90 dollars and now i amstuck on 3 and 4

Explanation / Answer

Sales                              $90per unit   (63 / 70%) Variablecost                  $63per unit   (70%) Contributionmargin        $27 per unit(30% of 90) 1. Breakeven   =   $1,350,000 /$27   =   50,000 units 2.   Total Sales to earn a profit of$60,000   =   ($1,350,000 + $60,000)/ $27   =   52,222 units or 52,222 x90 i.e.       $4,700,000 3. $135,000 /$27   =   5,000 additional units mustbe sold.       Check       TotalContribution      55,000   x$27                     $1,485,000       Fixedcost             ($1,350,000+$135,000)         $1,485,000 4. Revised Selling price perunit      $90 x1.2      =   $108.00      Revised Variablecost               $63x 1.1      =   $ 69.30      Revised Contributionmargin                           $ 38.70              FixedCost   ($1,350,000 +$198,000)      =   $1,548,000              BEP(units)      =   $1,548,000/$38.70      =   40,000units            Check        TotalContribution   40,000 units x $38.70         $1,548,000         FixedCost  ($1,350,000 +$198,000)               $1,548,000            Check        TotalContribution   40,000 units x $38.70         $1,548,000         FixedCost  ($1,350,000 +$198,000)               $1,548,000

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