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Exercise 16-10 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
Exercise 16-10 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 $22 each in the coming year. Total variable costs equal $1,086,800. Total fixed costs equal $8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of $245,000. 4. What if the average price per unit increased to $23.50? Recalculate: Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of $245,000 a. c
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