Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit

Schylar Pharmaceuticals, Inc., plans to sell 125,000 units of antibiotic at an average price of $21 each in the coming year. Total variable costs equal $840,000. Total fixed costs equal $7,700,000.

need 4b, 4c, 4d solved

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.)

14.28

68

2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar. 11,323,529

3. Calculate the sales revenue needed to achieve a target profit of $285,000. Round your answer to the nearest dollar. 11,742,647

4. What if the average price per unit increased to $22.50? Recalculate the following:

a. Contribution margin per unit. Round your answer to the nearest cent. $15.78

b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. blank

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. $fill in the blank 7

d. Sales revenue needed to achieve a target profit of $285,000. 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. $fill in the blank 8