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A company has the following information: Sales $25.000 $25 x 1,000 Variable Costs $10 x 1,000 If the company decides to sell 1,500 instead of
A company has the following information: Sales $25.000 $25 x 1,000 Variable Costs $10 x 1,000 If the company decides to sell 1,500 instead of 1,000 units. The total sales revenue and total variable costs will both increase. However, the sales price per unit and the variable costs per unit will remain $10,000 the same. Sales $25 x 1,500 $37,500 Variable Costs $10 x 1,500 $15,000 To earn the extra points, students must redo question #4 of the Term Project. Before completing question #4, please slowly read the below comments. 1. One of the most important concepts for the chapter is the treatment of sales price per unit and variable costs per unit. The sales price per unit is fixed. Likewise, variable cost per unit is fixed. What does that mean for the term project? Both the sales price per unit and the variable cost per unit were calculated in question #1 of the term project. These items should be used for question #4. Again, sales price per unit and variable cost per unit never change. 2. For question #4, students must use the formula for calculating target profit. The formula will provide both the total sales dollars and the sales units. To verify that the units are correct, students may multiple the target units times the sales price per unit (Sales price per unit from question #1). 3. To obtain the total variable cost, you must use the target units times the variable cost per unit. Target units were calculated using the formula (See item #2 in this announcement). Variable cost per unit was calculated in question #1 of the term project. A company has the following information: Sales $25.000 $25 x 1,000 Variable Costs $10 x 1,000 If the company decides to sell 1,500 instead of 1,000 units. The total sales revenue and total variable costs will both increase. However, the sales price per unit and the variable costs per unit will remain $10,000 the same. Sales $25 x 1,500 $37,500 Variable Costs $10 x 1,500 $15,000 To earn the extra points, students must redo question #4 of the Term Project. Before completing question #4, please slowly read the below comments. 1. One of the most important concepts for the chapter is the treatment of sales price per unit and variable costs per unit. The sales price per unit is fixed. Likewise, variable cost per unit is fixed. What does that mean for the term project? Both the sales price per unit and the variable cost per unit were calculated in question #1 of the term project. These items should be used for question #4. Again, sales price per unit and variable cost per unit never change. 2. For question #4, students must use the formula for calculating target profit. The formula will provide both the total sales dollars and the sales units. To verify that the units are correct, students may multiple the target units times the sales price per unit (Sales price per unit from question #1). 3. To obtain the total variable cost, you must use the target units times the variable cost per unit. Target units were calculated using the formula (See item #2 in this announcement). Variable cost per unit was calculated in question #1 of the term project
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