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Sunn Company manufactures a single product that sells for $180 per unit and whose variable costs are $135 per unit. The company's annual fixed costs
Sunn Company manufactures a single product that sells for $180 per unit and whose variable costs are $135 per unit. The company's annual fixed costs are $562,500. (a) Compute the company's contribution margin per unit. Sales per unit $ 180 per unit Less: Variable cost per unit 135 per unit Contribution margin $ 45 per unit (b) Compute the company's contribution margin ratio. Numerator: 1 Denominator: Contribution Margin Ratio Contribution margin per unit Income Contribution margin ratio $ 45 $ 180 25.0% (c) Compute the company's break-even point in units. Numerator: 1 Denominator: Break-Even Units Fixed costs 1 Contribution margin per unit Break-even units $ 562,500 1 $ 45 12,500 units (d) Compute the company's break-even point in dollars of sales. Numerator: - Denominator: Break-Even Dollars Fixed costs 1 Contribution margin ratio Break-even dollars $ 562,500 1 25% $ 2,250,000Sunn Company manufactures a single product that sells for $180 per unit and whose variable costs are $135 per unit. The company's annual fixed costs are $562,500. Management targets an annual income of $1,012,500. (1) Compute the unit sales to earn the target income. Units to achieve target 0 Fixed cost plus target income Contribution margin per unit (2) Compute the dollar sales to earn the target income. Fixed cost plus target income Contribution margin ratio Dollars to achieve target
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