Return to question 6 Lin Corporation has a single product whose selling price is

Question

Return to question 6 Lin Corporation has a single product whose selling price is $120 per unit and whose variable expense is $80 per unit. The company's monthly fixed expense is $50,000. 10 points Required: 1. Calculate the unit sales needed to attain a target profit of $10,000. 2. Calculate the dollar sales needed to attain a target profit of $15,000. For all requirements, do not round intermediate calculations.) Answer is complete but not entirely correct. Units sales to attain target profi 2 Dollar sales to attain target 1,500 25,000 pro fit

Explanation / Answer

Dollar Sales to attain target profit $195,000

Sales = Variable expenses + Fixed expenses + Profit

$120Q = $80Q + $50,000 + $15,000

$40Q = $65,000

Q = $65,000 / $40 per unit

Q = 1625 Units

Thus the target profit can be achieved by selling 1625 units per month, which represents $195,000 in total sales ($120 × 1625 units).

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