Question
Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Incorporated, has been experiencing financial difficulty for some time. The companys contribution
Due to erratic sales of its sole producta high-capacity battery for laptop computersPEM, Incorporated, has been experiencing financial difficulty for some time. The companys contribution format income statement for the most recent month is given below:
Sales (12,500 units $20 per unit) | $ 250,000 |
---|---|
Variable expenses | 150,000 |
Contribution margin | 100,000 |
Fixed expenses | 112,000 |
Net operating loss | $ (12,000) |
4. Refer to the original data. The Marketing Department thinks that a fancy new package for the laptop computer battery would grow sales. The new package would increase packaging costs by $0.70 per unit. Assuming no other changes, how many units would have to be sold each month to attain a target profit of $4,300?
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