Connect ?·> Secure | https://newconnect.mheducation.com/flow/connect.html Ch 05

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Connect ?·> Secure | https://newconnect.mheducation.com/flow/connect.html Ch 05 Ex 5-12 Saved Help Save& Exit Submit my work Exercise 5-12 Computing sales to achieve target income LO C2 Blanchard Company manufactures a single product that sells for $110 per unit and whose total variable costs are $88 per unit. The company's annual fixed costs are $308,000. Management targets an annual pretax income of $550,000. Assume that fixed costs remain at $308,000. points Skipped (1) Compute the unit sales to earn the target income. Choose Numerator: Choose Denominator: Units to Achieve Target eBook -Units to achieve target Hint Ask Print (2) Compute the dollar sales to earn the target income Choose Numerator: inator: Dollars to Achieve Ta Dollars to achieve target Graw Prev 1ofl Next 9:28 PM 0 Type here to search 4/27/2018

Explanation / Answer

1) Unit sale on target income :

2) Dollar sale on target income :

Contribution margin ratio = 22*100/110 = 20%

(fixed cost+Target income) / Contribution margin per unit = Units to achieve profit (308000+550000) / 22 = 39000 units

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