If Targeted Sales Are 12,000 Units, the Sales Price Per

question 45

True/False

If targeted sales are 12,000 units, the sales price per unit is $70, fixed costs are $130,000, and variable costs are $40 per unit, then planned profit must be $230,000.

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Definitions:

Contribution Margin Ratio

A financial metric expressing the percentage of each sales dollar remaining after variable costs are subtracted.

Fixed Expenses

Costs that do not change with the level of production or sales over a certain period, such as rent, salaries, and insurance.

Unit Contribution Margin

The difference between the selling price of a unit and its variable costs, indicating how much each unit contributes to covering fixed costs and generating profit.

Sales Volume

The total number of units sold within a specific period, often used as an indicator of business performance.