Business, 29.08.2020 01:01 jbutler7995

A furniture manucturer specializes in wood tables. The tables sell for per unit and incur per unit in variable costs. The company has in fixed costs per month. The company desires to earn an operating profit of per month. 1. Calculate the required sales in units to earn the target profit using the equation method.
2. Calculate the required sales in units to earn the target profit using the contribution margin method.
3. Calculate the required sales in dollars to earn the target profit using the contribution margin ratio method.
4. Calculate the required sales in units to break even using the contribution margin method.

Answers: 3

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Answer from: Batzs3rdacct

1. 100 units

2. 300 units

3. $30,000

4. 100 units

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

A furniture manufacturer specializes in wood tables. The tables sell for $100 per unit and incur $40 per unit in variable costs. The company has $6000 in fixed costs per month. The company desires to earn an operating profit of $12000 per month.

1. Calculate the required sales in units to earn the target profit using the equation method.

2. Calculate the required sales in units to earn the target profit using the contribution margin method.

3. Calculate the required sales in dollars to earn the target profit using the contribution margin ratio method.

4. Calculate the required sales in units to break even using the contribution margin method.

The explanation to the answers is now given as follows:

1. Calculate the required sales in units to earn the target profit using the equation method.

This can be calculated using the following formula:

Target profit = Net sales revenue - Total variable cost - Total fixed cost (1)

Where, by letting q denotes quantity sold;

Target profit = $12,000 per month

Net sales revenue = Selling price per unit * quantity sold = $100 * q = 100q

Total variable cost = Variable cost per unit * quantity sold = $40 * q = 40q

Total fixed cost = $6,000 per month

Substituting the values into equation (1) and solve for q, we have:

$12,000 = $100q - $40q - $6,000

$12,000 - $6,000 = $60q

$6,000 = $60q

q = $6,000 / $60

q = 100 units.

2. Calculate the required sales in units to earn the target profit using the contribution margin method.

Contribution margin per unit = Selling price per unit – Variable cost per unit = $100 - $40 = $60

Required sales in units to earn the target profit = (Fixed cost + Target profit) / Contribution margin per unit = ($6,000 + $12,000) / $60 = $18,000 / $60 = 300 units

3. Calculate the required sales in dollars to earn the target profit using the contribution margin ratio method.

Contribution margin ratio = Contribution margin / Selling price per unit = $60 / $100 = 0.60, or 60%

Required sales in dollars to earn the target profit = (Fixed cost + Target profit) / Contribution margin ratio = ($6,000 + $12,000) / 0.60 = $18,000 / 0.60 = $30,000

4. Calculate the required sales in units to break even using the contribution margin method.

Sales in units to break even = Fixed cost / Contribution margin per unit = $6,000 / $60 = 100 units

Answer from: Quest

in terms of experimental research, mcdonald’s charging different prices in the two cities relates to

Answer from: Quest

There is no graph so we cannot answer

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