7) Calculate Net Income for companies C, D and E Sales in Units D 35,000 8.000 10,000 Sales Price 8.00 20.00 6,000.00 Sales Dollars Variable Costs Contribution Margin Fixed Costs Pre-tax Income 8) Calculate the Sales Dollars needed to achieve Target Income for companies C, D and E D E Fixed Cost 90,000 55,000 232,500 Target Income (desired profi 50,000 8,000 100,000 CM Ratio Target Sales Dollars 9) Calculate the Sales Units needed to achieve Target Income for companies CD and E D E Fixed Cost 90,000.00 55,000.00 232,500.00 Target Income 50,000 8,000 100,000 CM per unit Target Sales Units Scenario 1 Unit product low level of production high level of production 20000 30000 10000 (50000-30000 3001 Change in cost Change in units Variable cost per unit - Variable Cost Per Unit (Highest activity cost- Lowest activity cost)/(Highest activity units - Lowest activity units) Fixed cost using high production units & cost- Fixed cost-Highest activity cost (Variable cost per unit Highest activity units) Fixed cost using low production units & cost-Fixed cost-Lowest activity cost- Variable cost per unit * Lowest activity units) 50000-(1.5*306 35000-(1.5.20 Scenario 2 Unit product low level of production high level of production 80000 170000 90000 (300000-165000 80000) Change in cost Change in units Variable cost per unit Variable Cost Per Unit (Highest activity cost- Lowest activity cost)/(Highest activity units - Lowest activity units) Fixed cost using high production units & cost- Fixed cost Highest activity cost (Variable cost per unit. Highest activity units) Fixed cost using low production units & costFixed cost-Lowest activity cost- Variable cost per unit * Lowest activity units) 2. sales price VC Contribution 300000-(1.5*176 165000-1.5*80 8 5 3 20 12 is 600 4500 1500 CM Ration contribution per unit /sales per unit 100 0.375 0.4 0.25 fixed cost 90000 55000 2325 break even units fixed cost / contribution 30000 875 155 break even Dollars fixed cost/CM ratio 240000 13750019304 D companies CD and E Sales in Units 35,000 8,000 10,000 Sales Price 8.00 20.00 6,000.00 Sales Dollars Variable Costs Contribution Margin Fixed Costs Pre-tax Income 8) Calculate the Sales Dollars needed to achieve Target Income for companies C, D and E E D 55,000 90,000 232,500 Fixed Cost 8,000 100,000 50,000 Target Income (desired profi CM Ratio Target Sales Dollars 9) Calculate the Sales Units needed to achieve Target Income for companies CD and E D E 55,000.00 90,000.00 232,500.00 Fixed Cost 50,000 8,000 100,000 Target Income CM per unit Target Sales Units