Sunn Company manufactures a single product that sells for $120 per unit and whose variable costs are $90 per unit. The companys annual fixed costs are $432,000. Management targets an annual income of $750,000.

(1) Compute the unit sales to earn the target income.
Numerator:	/	Denominator:	=	Units to Achieve Target
	/		=	Units to achieve target
(2) Compute the dollar sales to earn the target income.
Numerator:	/	Denominator:	=	Dollars to Achieve Target
	/		=	Dollars to achieve target

Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The companys annual fixed costs are $638,000. The sales manager predicts that next years annual sales of the companys product will be 40,800 units at a price of $208 per unit. Variable costs are predicted to increase to $148 per unit, but fixed costs will remain at $638,000. What amount of income can the company expect to earn under these predicted changes? Prepare a contribution margin income statement for the next year.

SUNN COMPANY
Contribution Margin Income Statement
	Units	$ per unit
Contribution margin