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 140,000 units of antibiotic at an average

image text in transcribedimage text in transcribed

Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 140,000 units of antibiotic at an average price of $19 each in the coming year. Total variable costs equal $798,000. Total fixed costs equal $8,200,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. 13.30 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 $275,000. Round your answer to the nearest dollar. 4. What if the average price per unit increased to $20.507 Recalculate the following: a. Contribution margin per unt. 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. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-6) above for the contribution margin rato, and round your final answer to the nearest dollar. 4. What if the average price per unit increased to $20.507 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-b) 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 $275,000. In your computations, use your rounded answer from part (4-b) 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

Human Resource Management

Authors: Robert L. Mathis, John H. Jackson

13th Edition

053845315X, 978-0538453158

More Books

Students also viewed these Accounting questions