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stellarik [79]
3 years ago
7

Wang Co. manufactures and sells a single product that sells for $540 per unit; variable costs are $324 per unit. Annual fixed co

sts are $836,000. Current sales volume is $4,290,000. Management targets an annual pre-tax income of $1,215,000. Compute the unit sales to earn the target pre-tax net income.
Business
1 answer:
omeli [17]3 years ago
5 0

Answer: 9,495 units

Explanation:

First find the contribution margin:

= Sales price - Variable cost

= 540 - 324

= $216 per unit

The unit sales required can be calculated by the formula:

= (Annual pre-tax income target + Fixed cost) / Contribution margin

= (1,215,000 + 836,000) / 216

= 9,495.37 units

= 9,495 units

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