Question
Last year Company E sold 6,000 units of its only product for a price of $40 per unit. Total fixed costs/expenses per year were $120,000
Last year Company “E” sold 6,000 units of its only product for a price of $40 per unit. Total fixed costs/expenses per year were $120,000 and the contribution margin per unit was $30.
Required
a. How much was the Variable Cost/Expense Per Unit?
b. How much Income did Company “E” make last year? (ignore income taxes)
c. Assuming this year’s sales price, fixed costs/expenses and contribution margin per unit are the same as last year, how many units will Company “E” have to sell to generate a desired profit of $72,000? (ignore income taxes)
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
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