Lin Corporation has a single product whose selling price is $140 and whose varia

Question

Lin Corporation has a single product whose selling price is $140 and whose variable expense is S70 per unit The company's monthly fixed expense is $31,800. 10.00 points Required $6,700. (Round up your answer to the nearest whole number) Unit sales Hints References eBook & Resources Hint#1 Check my work 10.00 points 2. Using the formula method, determine for the unit sales that are required to earn a target profit of $9,600. (Round up your answer to the nearest whole number.) Unit sales Hints References eBook & Resources

Explanation / Answer

Equation Method Let Number of Units sold be 'Q' Sales = Variable Expenses + Fixed Expenses + Profit 140Q = 70Q + 31800+6700 140Q = 70Q + 38500 140Q -70Q = 38500 70Q = 38500 Q = 38500/70 = 550 Units Formula Method Calculation of Contribution Margin Per Unit Selling price per unit 140 Variable Cost per unit 70 Contribution Margin Per Unit 70 Q = (Fixed Expenses + Target Profit)/ Contribution Margin Per unit Q = (31800 + 9600)/ 70 Q = 41400/ 70 Q = 591

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