The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the sum of the fixed expenses and the target profit by the contribution margin ratio.

TrueFalse

18.Hirt Corporation sells its product for $12 per unit. Next year, fixed expenses are expected to be $400,000 and variable expenses are expected to be $8 per unit. How many units must the company sell to generate net operating income of $80,000?

A.50,000 unitsC. 60,000 units

B.120,000 unitsD. 100,000 units

19.A product sells for $20 per unit and has a contribution margin ratio of 40 percent. Fixed expenses total $240,000 annually. How many units of the product must be sold to yield a profit of $60,000?

A.37,500 unitsC. 65,000 units

B.40,000 unitsD. 30,000 units

20.Last year, Flynn Company reported a profit of $70,000 when sales totaled $520,000 and the contribution margin ratio was 40%. If fixed expenses increase by $10,000 next year, what amount of sales will be necessary in order for the company to earn a profit of $80,000?

A.$600,000C. $562,000

B.$570,000D. $625,000

21.Data concerning Hewell Enterprises Corporation's single product appear below:

Selling Price per unit ------------------ $200

Variable expense per unit------------- $70

Fixed expense per month------------- $559,000

The unit sales to attain the company's monthly target profit of $14,000 is closest to:

A.4,408 unitsC. 5,153 units

B.8,186 unitsD. 2,865 units

22.Lone International Corporation's only product sells for $230.00 per unit and its variable expense is $80.50. The company's monthly fixed expense is $822,250 per month. The unit sales to attain the company's monthly target profit of $33,000 is closest to:

A.3,718 unitsC. 10,624 units

B.6,688 unitsD. 5,721units

23.Hassick Corporation produces and sells a single product whose contribution margin ratio is 63%. The company's monthly fixed expense is $460,530 and the company's monthly target profit is $19,000. The dollar sales to attain that target profit is closest to:

A.$290,134C. $761,159

B.$302,104D. $731,000

24.The contribution margin ratio of Lime Corporation's only product is 75%. The company's monthly fixed expense is $688,500 and the company's monthly target profit is $20,000. The dollar sales to attain that target profit is closest to:

A.$531,375C. $918,000

B.$944,667D. $516,375