Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price

image text in transcribed

Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $23 each in the coming year. Total variable costs equal $897,000. Total fixed costs equal $7,800,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) 2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar. 3. Calculate the sales revenue needed to achieve a target profit of $250,000. Round your answer to the nearest dollar. $ 4. What if the average price per unit increased to $24.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. C. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-6) above for the contribution margin ratio, and round your final answer to the nearest dollar. d. Sales revenue needed to achieve a target profit of $250,000. In your computations, use your rounded answer from part (4-6) above for the contribution margin ratio, and round your final answer to the nearest dollar

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Auditing

Authors: Guadarshan S. Gill, Cosserat Graham, Leung Philomena, Coram Paul

5th Edition

0471340723, 978-0471340720

More Books

Students also viewed these Accounting questions