Hounshell Corporation produces and sells a single product. Data concerning that product appear below: Selling price per unit $ 123.00 Variable expense per unit $ 49.60 Fixed expense per month $ 265,580 ________________________________________ Required: a. Assume the company’s monthly target profit is $20,680. Determine the unit sales to attain that target profit. Unit sales to attain target profit units b. Assume the company’s monthly target profit is $6,460. Determine the dollar sales to attain that target profit. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) Dollar sales to attain target profit $ Explanation: Per Unit Percent of Sales Selling price per unit $ 123.00 100% Variable expense per unit 49.60 40% ________________________________________ ________________________________________ ________________________________________ Contribution margin per unit and CM ratio $ 73.40 60% ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________ a. Unit sales to attain target profit = (Target profit + Fixed expenses) / Unit CM = ($265,580 + $20,680)/$73.40 = 3,900 b. Dollar sales to attain target profit = (Target profit + Fixed expenses) / CM ratio = ($265,580 + $6,460)/0.60 = $453,400

Problem 6-202 [LO5]

Hounshell Corporation produces and sells a single product. Data concerning that product appear below:

 

Selling price per unit	$	123.00
Variable expense per unit	$	49.60
Fixed expense per month	$	265,580

Required:

a.	Assume the company’s monthly target profit is $20,680. Determine the unit sales to attain that target profit.

 

Unit sales to attain target profit

units

 

b.	Assume the company’s monthly target profit is $6,460. Determine the dollar sales to attain that target profit. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

 

Dollar sales to attain target profit

$

Explanation:

	Per Unit		Percent of Sales
Selling price per unit	$	123.00	100%
Variable expense per unit		49.60	40%
Contribution margin per unit and CM ratio	$	73.40	60%

 

a.

 

Unit sales to attain target profit = (Target profit + Fixed expenses) / Unit CM = ($265,580 + $20,680)/$73.40 = 3,900

b.

Dollar sales to attain target profit = (Target profit + Fixed expenses) / CM ratio = ($265,580 + $6,460)/0.60 = $453,400