This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: many units must be sold to achieve this goal? Required: Compute the amount of sales in dollars and in units using the Equation Approach and the Contribution Margin Approach. Problem Equation Approach Sales = Variable Expenses + Fixed Expenses + Profits $10Q = $2Q + $30,000 + $24,000 $8Q = $54,000 Q = 6,750 units Total sales = 6,750 * $10 = $67,50 The Contribution Margin Approach Solution Unit sales to attain = (Fixed Expenses + Target Profit) the target profit Unit Contribution Margin Q = ($30,000 + $24,000) ($10$2) Q = $54,000 $8 Q = 6,750 units The Contribution Margin Approach Sales to attain = (Fixed Expenses + Target Profit) Target profit Contribution Margin Ratio Sales = ($30,000 + $24,000) ($8/$10) Sales = ($54,000) .80 Sales = $67,500...
View
Full
Document
 Spring '11
 Galvan
 Managerial Accounting

Click to edit the document details