Build a worksheet to calculate the level of sales needed to earn a target profit assuming the sales mix remains constant. Sales in units Price per unit Variable cost per unit Product A 9,000 S 150 $ 100 Product B 13,000 $ 200 $ 130 Total fixed cost Target Profit $ $ 400,000 6,000 Sales Mix Total CM Ratio Product A Product B Total Sales Variable Cost Contribution Margin Step 1: Calculate the combined CMR Target Profit CM Ratio Total Sales Variable Cost Contribution Margin Fixed Cost Net Income Step 2: Caculate the level of sales required to earn the target profit Product A Product B Step 3: Calculate the sales for each product Calculation of unit sales Sales Divided by price per unit Number of units at target profit Target Profit CM Income Statements Total Sales Variable Cost Contribution Margin Fixed Cost Net Income (TARGET PROFIT) Step 4: The proof! Build a worksheet to calculate the level of sales needed to earn a target profit assuming the sales mix remains constant. Sales in units Price per unit Variable cost per unit Product A 9,000 S 150 $ 100 Product B 13,000 $ 200 $ 130 Total fixed cost Target Profit $ $ 400,000 6,000 Sales Mix Total CM Ratio Product A Product B Total Sales Variable Cost Contribution Margin Step 1: Calculate the combined CMR Target Profit CM Ratio Total Sales Variable Cost Contribution Margin Fixed Cost Net Income Step 2: Caculate the level of sales required to earn the target profit Product A Product B Step 3: Calculate the sales for each product Calculation of unit sales Sales Divided by price per unit Number of units at target profit Target Profit CM Income Statements Total Sales Variable Cost Contribution Margin Fixed Cost Net Income (TARGET PROFIT) Step 4: The proof