The following is information concerning a product manufactured by Ames Brothers.

Question

The following is information concerning a product manufactured by Ames Brothers. Sales price per unit variable cost per unit Total fixed manufacturing and operating costs (per month) 76 43 380,000 a. Determine the unit contribution margin b. Determine the number of units that must be sold each month to break even. (Round your answer to the nearest whole number.) c. Determine the number of units that must be sold to earn an operating income of $234,000 per month. (Round your answer to the nearest whole number.) a. Unit contribution margin b. Break-even units C. Target sales in units

Explanation / Answer

Answer to a Particulars Amt Sales Price 76 Less: Variable Cost 43 Contribution Margin 33 Answer to b Particulars Amt Fixed Cost (A) 380000 Contribution Margin (B) 33 Break Even (A/B) 11515 Answer to c Particulars Amt Fixed Cost 380000 Profit required 234000 Contribution Margin Required (A) 614000 Contribution Margin (B) 33 Target Sales (A/B) 18606

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