Chapter 5 6 Help Exercise 5-7 Target Profit Analysis [LOs-6] Lin Corporation has

Question

Chapter 5 6 Help Exercise 5-7 Target Profit Analysis [LOs-6] Lin Corporation has a single product whose selling price is $140 per unit and whose variable expense is $70 per unit. The companys Required 1. Calculate the unit sales needed to attain a target profit of $7050. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to ettain a target profit of $8.200. (Round your intermediate calculations to the nearest whole number.) 1. Units sales to attain target proft Dollar sales to attain target proft MacBook Air

Explanation / Answer

1. Units sales to attain target profit = ($32,500 + $7,050) / ($140 - $70) = 565 units

2. Contribution margin ratio = ($140 - $70) / $70 = 0.50 or 50%

Dollar sales to attain target profit = ($32,500 + $8,200) / 0.50 = $81,400

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