Question: Target Company's most recent contribution format income statement is presented below: Sales.....................................................$75,000 Variable expenses.................................$45,000 Contribution Margin .............................$30,000 Fixed expenses... ..................................$16,000 Net operating income...........................$14, 000 The

Target Company's most recent contribution format income statement is presented below:

Sales.....................................................$75,000

Variable expenses.................................$45,000

Contribution Margin.............................$30,000

Fixed expenses... ..................................$16,000

Net operating income...........................$14, 000

The company sells its only product for $15per unit. There is no beginning or ending inventories:

1. Compute the company's break-even point in units.

2. Compute the total variable expenses at the break-even point

3. How many units would have to be sold to earn a target profit of $9,000 before taxes?


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