Chapter 91755.Refer to John Anderson Company. If the unit sales price for John Anderson’s sole product was $10,how many units would it have needed to sell to produce a profit of $40,000?a.27,500b.29,000c.28,000d.can't be determined from the information givenANS: CContribution Margin at $40,000 profit:$(40,000 + 100,000) = $140,000Contribution Margin Ratio: 0.50$140,000 / .50 = $280,000$280,000 / $10 = 28,000 units
PTS:1DIF:ModerateOBJ:9-3NAT:AACSB: Analytical SkillsLOC:AICPA Functional Competencies: Measurement, Reporting56.A firm estimates that it will sell 100,000 units of its sole product in the coming period. It projects thesales price at $40 per unit, the CM ratio at 60 percent, and profit at $500,000. What is the firmbudgeting for fixed costs in the coming period?
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PTS:1DIF:ModerateOBJ:9-3NAT:AACSB: Analytical SkillsLOC:AICPA Functional Competencies: Measurement, Reporting