# Question

Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of $22 each in the coming year. Total variable costs equal $1,086,800. Total fixed costs equal $8,000,000.

Required:

1. What is the contribution margin per unit? What is the contribution margin ratio?

2. Calculate the sales revenue needed to break even.

3. Calculate the sales revenue needed to achieve a target profit of $245,000.

4. What if the average price per unit increased to $23.50? Recalculate:

a. Contribution margin per unit

b. Contribution margin ratio (rounded to four decimal places)

c. Sales revenue needed to break even

d. Sales revenue needed to achieve a target profit of $245,000

Required:

1. What is the contribution margin per unit? What is the contribution margin ratio?

2. Calculate the sales revenue needed to break even.

3. Calculate the sales revenue needed to achieve a target profit of $245,000.

4. What if the average price per unit increased to $23.50? Recalculate:

a. Contribution margin per unit

b. Contribution margin ratio (rounded to four decimal places)

c. Sales revenue needed to break even

d. Sales revenue needed to achieve a target profit of $245,000

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