9,500 units will have to be sold to earn $100,000 per year.
Step by step:
($174,000 + $30,000 + $100,000)/($27 + $5 increase in sales price) = 9,500
The answer is 9500 units.
The contribution margin is calculated as sales - Variable costs. The contribution margin ratio is calculated as (revenue - Variable charges) / sales.
The contribution margin ratio is the difference between a company's sales and variable fees, expressed as a percentage.
The full margin generated through an entity represents the total income to be had to pay for constant costs and generate an income.
When a company sells one unit above the wide variety required to break even, the company's net running profits will: exchange from 0 to net operating earnings.
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