Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit Schylar Pharmaceuticals, Inc., plans to sell 145,000 units of antibiotic at an average price of $19 each in the coming year. Total variable costs equal $826,500. Total fixed costs equal $7,900,000. Required: 1. What is the contribution margin per unit? Round your answer to the nearest cent. $______ What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) ________ 2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar. $_______ 3. Calculate the sales revenue needed to achieve a target profit of $230,000. Round your answer to the nearest dollar. $______ 4. What if the average price per unit increased to $20.50? Recalculate the following: a. Contribution margin per unit. Round your answer to the nearest cent. $______ b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. ________- c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar. $_______ d. Sales revenue needed to achieve a target profit of $230,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar. $______
Contribution Margin Ratio, Break-Even Sales Revenue, Sales Revenue for Target Profit
Schylar Pharmaceuticals, Inc., plans to sell 145,000 units of antibiotic at an average price of $19 each in the coming year. Total variable costs equal $826,500. Total fixed costs equal $7,900,000.
Required:
1. What is the contribution margin per unit? Round your answer to the nearest cent.
$______
What is the contribution margin ratio? Round your answer to two decimal places. (Express as a decimal-based answer rather than a whole percent amount.) ________
2. Calculate the sales revenue needed to break even. Round your answer to the nearest dollar.
$_______
3. Calculate the sales revenue needed to achieve a target profit of $230,000. Round your answer to the nearest dollar. $______
4. What if the average price per unit increased to $20.50? Recalculate the following:
a. Contribution margin per unit. Round your answer to the nearest cent. $______
b. Contribution margin ratio. Enter your answer as a decimal value (not a percentage), rounded to four decimal places. ________-
c. Sales revenue needed to break even. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar.
$_______
d. Sales revenue needed to achieve a target profit of $230,000. In your computations, use your rounded answer from part (4-b) above for the contribution margin ratio, and round your final answer to the nearest dollar. $______
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