How many units must be sold to earn a profit of $30,000?


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How many units must be sold to earn a profit of $30,000? 1 answer below » BREAK-EVEN POINT, TARGETED PROFIT, MARGIN OF SAFETY Cutlass Company’s projected profit for the coming year is as follows: Total Per Unit Sales $200,000 $20 Less: Variable expenses 120,000 12 Contribution margin $ 80,000 $ 8 Less: Fixed expenses 64,000 Operating income $ 16,000 Required: 1. Compute the break-even point in units. 2. How many units must be sold to earn a profit of $30,000? 3. Compute the contribution margin ratio. Using that ratio, compute the additional profit View complete question » BREAK-EVEN POINT, TARGETED PROFIT, MARGIN OF SAFETY Cutlass Company’s projected profit for the coming year is as follows: Total Per Unit Sales $200,000 $20 Less: Variable expenses 120,000 12 Contribution margin $ 80,000 $ 8 Less: Fixed expenses 64,000 Operating income $ 16,000 Required: 1. Compute the break-even point in units. 2. How many units must be sold to earn a profit of $30,000? 3. Compute the contribution margin ratio. Using that ratio, compute the additional profit that Cutlass would earn if sales were $25,000 more than expected. 4. Suppose Cutlass would like to earn operating income equal to 20 percent of sales revenue. How many units must be sold for this goal to be realized? Prepare an income statement to prove your answer. 5. For the projected level of sales, compute the margin of safety. View less » Jul 24 2014 07:51 AM

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