Best writers. Best papers. Let professionals take care of your academic papers

Order a similar paper and get 15% discount on your first order with us
Use the following coupon "FIRST15"
ORDER NOW

I am having an issue answering this question “A company wants

/in /by

I am having an issue answering this question “A company wants to have
$5 million in sales with $1 million in profit. It will have fixed costs of $3 million. Each unit of its product sells for $20. How much contribution per unit must the company have to meet its goals?”

(finding the variable cost) is where i am currently stuck: The final answer is contribution per unit will be $16

Wants $5,000,000 in sales
Wants $1,000,000 in profit
Will have fixed cost of $3,000,000
Each unit sells for $20
How much contribution per unit must company have?

# of units = Revenue / sales price/unit
$5,000,000 / $20 = 250,000 is # of units * i have the number of units, now how do i calculate the total variable cost?

because next if need to calculate the variable cost per unit using Total variable cost / # units sold (250,000 i believe) = Variable Cost per unit

then finally i can compute the contribution

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"