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vichka [17]
2 years ago
8

M and M, Inc. produces a product that has a variable cost of $4.20 per unit. The company's fixed costs are $45,600. The product

is sold for $8 per unit and the company desires to earn a target profit of $11,400. What is the amount of sales that will be necessary to earn the desired profit
Business
1 answer:
never [62]2 years ago
7 0

The amount of sales that will be necessary to earn the desired profit is $120,000.

<h3>What is desired profit?</h3><h3 />

Desired profit refers to the amount of the profit expected by the company which is estimated by them as per the sales of the company.  The sales are also estimated and the company makes the budget of it.

To calculate the desired sale we need to calculate the contribution which is calculated as follows:-

Contribution margin per unit = (Selling price per unit - Variable costs per unit)

Contribution margin per unit = ($8 per unit - $4.20 per unit) = 3.80 per unit

Break-even point in units = (Fixed costs + Desired profit) ÷ Contribution margin per unit

Break-even point in units = ($45,600 + $11,400) ÷ 3.80 per unit = 15,000 units

Break-even point in dollars = Break-even point in units × Selling price per unit

Break-even point in dollars = 15,000 units × $8 = $120,000

Thus the desired sales is $120,000.

Learn more about profit here:

brainly.com/question/15036999

#SPJ1

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4 0
3 years ago
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Answer:

A debit to Unearned Rent and a credit to Rent Earned for $2,400

Explanation:

When cash is collected in advance for revenue from lease, the revenue will not be recorded as revenue until the lease service has been performed. Hence the cash collected in advance will be recorded as

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Credit Deferred revenue  $6,400

Being cash collected on October 1 for lease to run for 8 months.

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To recognize this amount, Debit Unearned/Deferred revenue, credit revenue with the amount earned.

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3 years ago
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6 0
3 years ago
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