Question

Nombre Company management predicts $1,512,000 of variable costs, $1,987,600 of fixed costs, and a pretax income of $280,400 in the next period. Management also predicts that the contribution margin per unit will be $42

Required:
a. Compute the total expected dollar sales for next period.
b. Compute the number of units expected to be sold next period.

Answer 1

See below

Step-by-step explanation:

a. Total expected dollar sales

Sales - Variable cost - Fixed cost = Pre tax income

Sales -

b. Number of units expected to be sold next period

= Fixed cost / Contribution margin per unit

= $1,987,600 / $42

= 47,323 units