Asked by Jennifer Esparza on Jul 15, 2024
Verified
Rachal Corporation produces and sells a single product whose selling price is $150.00 per unit and whose variable expense is $57.00 per unit. The company's monthly fixed expense is $381,300.Required:a. Assume the company's monthly target profit is $9,300. Determine the unit sales to attain that target profit.b. Assume the company's monthly target profit is $18,600. Determine the dollar sales to attain that target profit.
Target Profit
The specific amount of profit a company aims to achieve within a specific period.
Dollar Sales
The total revenue generated from the sale of goods or services, measured in dollars.
Unit Sales
The measure of the quantity of individual items sold by a company, as opposed to total revenue.
- Ascertain the quantity and monetary sales needed to reach certain profit targets.
Verified Answer
BP
Bailey ParksJul 20, 2024
Final Answer : 
a.Unit sales to attain target profit = (Target profit + Fixed expenses) ÷ Unit contribution margin= ($381,300 + $9,300) ÷ $93.00 per unit = 4,200 unitsb. Dollar sales to attain target profit = (Target profit + Fixed expenses) ÷ Contribution margin ratio= ($381,300 + $18,600) ÷ 0.62 = $645,000
a.Unit sales to attain target profit = (Target profit + Fixed expenses) ÷ Unit contribution margin= ($381,300 + $9,300) ÷ $93.00 per unit = 4,200 unitsb. Dollar sales to attain target profit = (Target profit + Fixed expenses) ÷ Contribution margin ratio= ($381,300 + $18,600) ÷ 0.62 = $645,000
Learning Objectives
- Ascertain the quantity and monetary sales needed to reach certain profit targets.