Answer:
(a) $8.20
(b) $1,125,000
(c) 125,000
Explanation:
(a) Unit selling price:
= (Total cost incurred + Desired profit) ÷ Number of units sold
= ($630,000 + $600,000) ÷ 150,000
= $8.20
(b) Profit = Dollar sales - Variable cost - Fixed cost
($ sales × 20% profit) = $ sales - ($ sales × 60%) - $225,000
($ sales × 20% profit) = ($ sales × 40%) - $225,000
$225,000 = ($ sales × 40%) - ($ sales × 20% profit)
$225,000 = ($ sales × 20%)
Dollar sales = $225,000 ÷ 20%
= $1,125,000
(c) No. of units required to be sold:
= Dollar sales ÷ Selling price per unit
= $1,125,000 ÷ $9
= 125,000
