Dollar Sales Needed to Attain Target Profit

Variable expense per unit 2. Compute the dollar sales required to attain the target profit of 2000000 presuming that the company continues to use independent sales agents and the company agrees to their demand for a 25 sales commission.

Sales Targets Setting Performance Target Kpis Klipfolio

Units sales to attain target profit units 2.

. What dollar sales is required to attain a target profit of 210600. Dollar sales needed to attain a target profit of 63000. The companys monthly fixed expense is 31750.

Under CVP equation approach we can find the number of units to be sold to obtain target profit by solving the equation where profits are equal to target profit that is 40000. Fixed expenses Target net profitTotal contribution marginFixed expenses Target net profitContribution margin ratio Fixed expensesContribution margin per unitTarget net profitContribution margin ratio. Target Profit 1200 Divided by Contribution Margin per unit 4 Selling Price 1350 - Cost of shirt 8 - Commission 150 Unit to sale 300 sweatshirts Units to be sold 300 sweatshirts Multiplied by Selling Price 135 Sales in Dollars 4050 2.

This results in a reported variance between the actual and target. The dollar sales required to attain the target profit is computed as follows. Again it is possible to jump to step b by dividing the fixed costs and target income by the per unit contribution margin.

The unit sales and dollar sales needed to attain the target profit. Calculate the unit sales needed to attain a target profit of 8450. Profit Unit CM Q Fixed expenses 7900 134 67 Q 32300 7900 67 Q 32300 67 Q 7900 32300.

To prove let us compute for the net income at 8000 units. Units sales to attain target profit 2. Round your intermediate calculations to the nearest whole number Explanation 1.

Since there are no fixed costs the number of unit sales needed to yield the desired 1200 in profits can be obtained by dividing the target 1200 profit by the unit contribution margin. Once the basic data is calculated it can offer a great deal of insight and help in planning. Profit CM ratio Sales Fixed expenses 60000 040 Sales 180000 040 Sales 240000 Sales 240000 040 Sales 600000 Exercise 6-15 Operating Leverage LO6-1 LO6-8 Magic Realm Inc has developed a new fantasy board game.

Required sales volume to earn 200000. Variable expenses are reduced by 280 per unit. A target income of 60000 before taxes Analysis.

Critical Thinking AICPA FN. A target income equal to 40 of sales. Determine the dollar sales to attain the companys target profit.

Sales volume required in terms of dollars. Assume that Hooper places an initial order for 75 sweatshirts. The old variable expens.

Break even in Units 0 sweatshirts Breakeven in Sales 0. Selling 8000 units will result in an operating income of 60000. Do not round intermediate calculations 2.

The unit sales and dollar sales needed to attain the target profit are computed as follows. A target income of 60000 before taxes. Round your intermediate calculations to the nearest whole number 1.

View the full answer Transcribed image text. Sales volume in units Selling price per unit 1680000. Compute the companys break-even point in sales dollars presuming that the company employs its own salespersons.

Lindon Company is the exclusive distributor for an automotive product that sells for 2800 per unit and has a CM ratio of 30. What is the companys new break-even point in unit sales and dollar sales. Sales volume required in terms of units.

Target profit is the expected amount of profit that the managers of a business expect to achieve by the end of a designated accounting period. Total sales dollars to attain target profit Fixed expenses Target profitCM ratio 585000 11250075 795000 AACSB. The number of unit sales needed to earn a target profit of 200800 is Sales Volume 8400 320000 200800 90-28 8400 A company has an opportunity to make a bulk sale that would not impact regular sales or total fixed expenses.

Target profit 1200 300 sweatshirts. 20000 units 40 per unit 800000. Units to Achieve a Target Income Total Fixed Costs Target Income Contribution Margin Per Unit 1500 Units 1800000 1200.

To obtain the dollar sales volume necessary to attain a given target profit which of the following formulas should be used. Unit sales needed to attain target profit Dollar sales needed to attain target profit 4. Do not round intermediate calculations 2.

The target profit is typically derived from the budgeting process and is compared with the actual outcome in the income statement. The equation method yields the required unit sales Q as follows. Dollar sales to attain target profit.

A target income of 60000 after taxes 40 tax rate. Calculate the dollar sales needed to attain a target profit of 9700. Profit Unit CM Q Fixed expenses 60000 12 Q 180000 12Q60000 180000 12Q240000 Q240000 12 per unit Q20000 units In dollar sales.

Thus the target profit can be achieved by selling 750 units per month which represents 187500 in total sales 250 750 units. Round your intermediate calculations to the nearest whole number 1. What level of unit sales and dollar sales is needed to attain a target profit of 1200.

What is his break-even point in unit sales and dollar sales. Target Profit AnalysisIt is a study or analysis of how much unit sales or dollar sales value a company must attain to realized the target profit estimated by the company. This is one of the key uses of the CVP analysis.

Calculate the dollar sales needed to attain a target profit of 8600. If one wants to know the dollar level of sales to achieve a target net income. Calculate the unit sales needed to attain a target profit of 4500.

Target profit analysis helps us to know how much in dollar sales a company will need to reach a certain profit point. Similarly the dollar sales needed to attain the target profit can be computed as follows. Knezevich Corporation makes a product that sells for 230 per unit.

Fixed cost Target profitSelling price per unit Variable cost per unit 400000 200000140 90 60000050 12000 units. Want to see the full answer. Calculate the dollar sales needed to attain a target profit of 9500.

Dollar sales to attain the target profit Fixed expenses Target profit CM ratio 187500. Minnesota Kayak Company needs to sell 28 kayaks in our example to break even. The variable cost per unit is 11 and the company desires a total profit of 4500.

Check out a sample textbook solution See solution Expert Solution Answer. Profit Unit CM Q Fixed expenses 60000 12 Q 180000. Break-even point in units Break-even point in dollar sales 3.

Target Profit Formula In Financial Projections Plan Projections