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AB D 1 Practice #3 d. Determine the number of units that must be sold to eam a profit of $20,000 Selling Price VC per

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AB D 1 Practice #3 d. Determine the number of units that must be sold to eam a profit of $20,000 Selling Price VC per unit CM per unit Fixed Expenses + Desired Profit CM Per unit Units Proof of units per unit Total Sales Variable Expenses Contribution Margin Foxed Expens Operating income 26 Toy Store 5,000 toys sold $40 per toy 60% of selling price 0.6 2 3 Revenue: Quantity of toys sold Average sale price of toys 6 Purchase price from Toy Supplier 7 Selling Expenses: 8 Rent 9 Complimentary Shipping to customers 10 Sales Salaries + commissions 11 Advertising F2 Depreciation on department laptops 3 Administrative Expenses 4 Depreciation on office equipment 5 Offsite billing department Administrative salaries Employee Benefits $1 $8,000 per month $5 per toy sold $3,000 per month, plus 10% of sales $2,000 per month $600 onth $800 per month $1,000 per month, plus $1 per toy sold $6,000 per month 20% of administrative salaries Per Unit $40 (24) Toy Store Contribution Income Statement For the month ended December 31, Total Sales $200,000 Variable expenses Cost of Goods Sold (120,000) Sales commissions (20,000) Delivery of necklaces (25,000) Offsite Billing (5,000) Total variable expenses (170,000) Contribution margin 30,000 Fixed Expenses: Store rent (8,000) Sales Salaries (3,000) Advertising (2,000) Depreciation on laptops (600) Depreciation on office equip (800) Offsite billing (1,000) Administrative salaries (6,000) Employee benefits (1 200) total fixed expenses (22,600) Net operating income (loss) 7,400 (5) (1) (34) 6

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