Question

A company manufactures and sells a single product that sells for $475 per unit; unit variable costs are $280. Annual fixed costs are $550,000. Current sales volume is $1,150,000. Flannigan Company management targets an annual pre-tax income of $850,000. Compute the unit sales to earn the target pre-tax net income.

Answer 1

Answer:

$195 per unit.

Explanation:

• Note. The question is incomplete as the concluding part requested for the calculation of contribution margin per unit.

The formula for contribution margin per unit is denoted as;

Contribution margin per unit = Selling price per unit - Variable cost per unit.

Given that;

Selling price per unit = $475

Variable cost per unit = $280

Contribution margi per unit

= $475 - $280

= $195 per unit