Question
A retail company has a profit margin of 10% on its sales. The company's fixed costs are $50,000, and its variable costs are $30 per
A retail company has a profit margin of 10% on its sales. The company's fixed costs are $50,000, and its variable costs are $30 per unit. The company has a target profit of $80,000 and expects to sell 10,000 units of its product.
Required:
- Calculate the selling price per unit.
- Determine the break-even point in units and in sales dollars.
- Determine the sales revenue required to achieve the target profit.
- Calculate the company's margin of safety in dollars.
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Management Accounting
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
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