1.  A company plans to reduce the price of its entire line of skateboards by 3%. Given the following information,  the company needs to retain its 2% profit percentage (as a percentage of sales) with the planned price reduction. (Note: Unit fixed and variable costs will remain constant.)

Sales Volume 120,000 Units

Contribution Margin .35 (35%)

Fixed costs $6,840,000

Net Profit $360,000  

Calculate the sales volume.

 

2.  If a company has $11,500,000 in sales, a profit of 8.5% of sales, and a contribution margin of 45%, what are its total fixed costs?