Practice questions:

1. Wang Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit. Annual fixed costs are $801,000. Current sales volume is $4,200,000. Management targets an annual income of $1,125,000. Compute the unit sales to earn the target income.

a. 4,444.

b. 7,500.

c. 6,650.

d. 10,700.

e. 11,750.

2. A jeans maker is designing a new line of jeans. These jeans will sell for $410 per unit and cost $328 per unit in variable costs to make. Fixed costs total $120,000. Contribution margin per unit is:

a. $52.

b. $62.

c. $72.

d. $82.

e. $92.